1. This petition under Articles 226 and 227 of the Constitution is directed against an order dated August 23, 1969, made by the State of Maharashtra, respondent No. 1, whereby the State Government set aside the order of the Sub-Divisional Officer, Yeotmal, dated September 12, 1967 holding that the petitioners were entitled to refund of certain amounts paid by them as gin, bale and boja tax.
2. The petitioners own a Ginning and Pressing Factory situated at Yeotmal within the municipal limits of the Yeotmal Municipal Council, respondents No. 2. On August 2, 1910, the Chief Commissioner, Central Provinces issued a Notification No. 823 under Section 44, Sub-sections (1) and (5) of the Berar Municipal Law, 1886. The said Notification was in the following terms:
Nagpur, the 2nd August, 1910.
No. 828. With reference to Section 44, Sub-sections (7) and (8) of the Berar Municipal Law, 1886, it is hereby notified that the Municipal Committee of Yeotmal in the Yeotmal District, directed the imposition with effect from the 1st August, 1910, of Tax on the Ginning and the Pressing of cotton under Section 41(1)(a)(b) of the said Law to be levied from all persons carrying on within the limits of the Yeotmal Municipality the trade of Ginning cotton or Pressing the same into Bales by means of steam or mechanical process at the following rates-
(1) For each Boja of Ten maunds ginned...8 pies.
(2) For each Boja of fourteen maunds pressed. ... 10 pies.
The tax is payable in one instalment on the 1st of September each year.
Second Secretary to the Chief
Commissioner, Central Provinces.
3. Under the Central Provinces and Berar Municipalities Act, 1922, which replaced the Berar Municipal Law, 1886, the tax imposed by the said notification continued to subsist and was levied as prescribed by the said Notification. It is the petitioners' case that the gin, boja and bale tax levied by the said notification was a tax on profession, trade or calling under Section 142A of the Government of India Act, and therefore, under the said Act it could not have been levied in excess of Rs. 50 per annum during the period in which the Government of India Act was in force. It is also the case of the petitioners that it is a tax in respect of profession, trade or calling within the meaning of Article 276 of the Constitution, and therefore, the total amount payable in respect of any one person to any municipality in the State by way of such taxes cannot exceed Rs. 250 per annum after January 26, 1950. Respondents No. 2, the Municipal Council, Yeotmal, however, recovered from the petitioners a sum of Rs. 15,721.41 during the period from 1939-40 till the year 1962-63 by way of such taxes, such amount being in excess of the constitutional limits prescribed by Section 142A of the Government of India Act, 1935 and Article 276 of the Constitution. By their notice dated March 16, 1967, respondents No. 2 made a demand upon the petitioners to pay to them the said tax for the years 1964-65 and 1965-66. The demand was in excess of the constitutional limits and accordingly the petitioners filed in this Court a petition under Article 226 of the Constitution being- Special Civil Application No. 304 of 1966. By the judgment delivered on December 23, 1966 Abhyankar and Tulzapurkar JJ., in the said petition, this Court quashed the said demand in so far as it was in excess of Rs. 250 per annum. According to the petitioners, after this pronouncement they for the first time became aware of the mistake of law tinder which they had so far been paying the amounts of the tax under the said notification. Accordingly by their advocate's letter dated March 16, 1967, the petitioners pointed out to respondents No. 2 the decision of the Court in the said Special Civil Application and called upon them to settle the accounts of the amounts in excess of the constitutional limits paid by the petitioners by way of tax under the said notification. In the said letter it was contended that on the pronouncement of the said judgment, the amounts so paid in excess by the petitioners became due to them within the meaning of the provisions of the C.P. and Berar Municipalities Act and the rules made thereunder. As no reply was received to the said letter and as the requests made therein were not complied with, the petitioners filed an appeal under Section 83(7) of the C.P. and Berar Municipalities Act in the Court of the Sub-Divisional Officer, Yeotmal. In the said petition of appeal, the petitioners averred that they were prepared to settle the figure of the excess amount or quantum of refund by amicably negotiating the same with respondents No. 2 as it was a matter of calculation. Thereafter the petitioners also filed a detailed statement showing a sum of Rs. 15,721.41 as being the amount of such excess paid by them and prayed for an order of refund of the said amount by respondents No. 2 to the petitioners. Respondents No. 2 filed their reply to the said petition of appeal in which they admitted the unconstitutionality of the levy and the facts averred by the petitioners. The only contentions raised by respondents No. 2 in their reply were: (1) that the petitioners' application for refund was barred by limitation and (2) that the petitioners' remedy lay not under the C.P. and Berar Municipalities Act, but under the Maharashtra Municipalities Act, 1965 which had come into force on June 15, 1966 and whereby the C.P. and Berar Municipalities Act was repealed.
4. The Sub-Divisional Officer, Yeotmal, by his order dated September 12, 1967 negatived the contentions raised on behalf of respondents No. 2 and allowed the petitioners' appeal and directed respondents No. 2 to pay the said sum of Rs. 15,721.41 to the petitioners within a period of 30 days from the date of his said order. Being aggrieved by the said order, respondents No. 2 filed a revision application under Section 83(1-A) of the C.P. and Berar Municipalities Act, 1922, to the State Government. This revision application was allowed and the order of the Sub-Divisional Officer set aside. In revision it was held that the petitioners' remedy did not lie under the C.P. and Berar Municipalities Act, but their proper remedy was to file a civil suit. It was further held that even assuming the petitioners could file an appeal against the refusal to refund the excess amounts paid by them, their remedy lay under the Maharashtra Municipalities Act and not under the C.P. and Berar Municipalities Act, and therefore, the appeal filed by them to the Sub-Divisional Officer, Yootmal, was incompetent and untenable. The State Government further held that under Section 318 of the Maharashtra Municipalities Act, the State Government has the power of revision, and therefore, they could revise the order of the Sub-Divisional Officer under the said Section 318 of the Act. It is against this order of the State Government that the petitioners have approached this Court under Article 226 of the Constitution.
5. In Bharat Kala v. Municipal Committee (1965) 69 Bom. L.R. 60 the question as to the constitutionality of a similar notification issued under Section 241(7)(a) of the Central Provinces Municipalities Act, 1922, as applied to Berar, came up for consideration before their Lordships of the Supreme Court. In that case, by the impugned notification the Municipal Committee, Dhamangaon, levied from all persons carrying on within its limits the trade of ginning or pressing cotton into bales by means of steam or mechanical process a tax at the rates specified in the said notification. It was contended that this was a tax on profession, trade or calling within the meaning of Section 142A of the Government of India Act and Article 276 of the Constitution. This contention was accepted by the Supreme Court and the Supreme Court held that the collection of a tax above the constitutional limits was not merely illegal or irregular but without jurisdiction. It was further held in that case that a suit by an assessee to recover the amount paid by him in excess of the constitutional limits would not be in respect of a matter purported to be clone under the C.P. and Berar Municipalities Act and the provisions of Section 48 of the said Act which prescribe a special period of limitation and the giving of a notice as a condition precedent to the institution of a suit, would not apply to such a suit. It was further held that the provisions by way of revision or appeal provided for in the C.P. and Berar Municipalities Act would not be attracted to a case where the tax was levied in excess of the constitutional limits prescribed either by Section 142A of the Government of India Act or Article 276 of the Constitution.
6. This is an authority directly in point and ordinarily in view of this authority, nothing further would have been required to be said in this case. Mr. Manohar, learned advocate for the petitioners, has, however, relied upon a judgment of a Division Bench of this High Court, consisting of Patel and Deshmukh, JJ. in Muni. Committee, Malkapur v. Ballabhdas  Mh. L.J. 286 : 69 Bom. L.R. 723 in which the Division Bench held that a suit to recover amounts paid in excess of the constitutional limits prescribed either by Section 142A of the Government of India Act, 1935, or Article 276 of the Constitution, did not lie and the proper remedy of the assessee was to follow the procedure prescribed by Sections 83, 84 and 85 of the C.P. and Berar Municipalities Act and the rules regulating the refund of taxes made in pursuance of the said Act. The Division Bench arrived at this finding after considering the decision of their Lordships of the Supreme Court in Bharat Kola Bhandar's case, referred to above, as also certain other decisions of the Supreme Court, In view of this judgment, we are, therefore, required to consider the matter in much greater detail than what would otherwise have been necessary,
7. In view of the pronouncement of the Supreme Court in Bharat Kala v. Municipal Committee, it is not disputed before us, as it was not disputed before the appellate and the revisional authorities, that for the period between January 31, 1940 and January 25, 1950 the Municipal Committee was not entitled to recover from the petitioners any amount in excess of the maximum limit prescribed under the said section and from January 26, 1950 onwards any amount in excess of the maximum limit prescribed by Article 276 of the Constitution. The only controversy between the parties is with respect to the competency of the remedy adopted by the petitioners. For the determination of this question it is necessary first to refer to relevant provisions of the C.P. and Berar Municipalities Act, 1922.
8. Clause (n) of Section 3 defines 'tax' as including any toll, rate, due, fee or other impost specified in Section 66. The definition of 'tax' is thus not an exhaustive but an inclusive definition. Section 48 prescribes certain conditions for the institution of a suit against the Municipal Committee, or any member, officer or servant thereof or any other person acting under the direction of any such Committee, member, officer or servant. The suits referred to in Section 48 are suits for 'anything done or purporting to be done under this Act'. The two conditions prescribed by Section 48 are giving of two months' notice prior to the institution of the suit and a special period of limitation of six months from the date of the accrual of the alleged cause of action for the institution of the suit. Section 66(7) specifies the different taxes which can be imposed by a Municipal Committee. They include a tax on buildings, lands, vehicles, tolls, octroi, market dues, terminal tax, etc. Clause (b) of Section 66(7) authorises the imposition of a tax on persons exercising any profession or Article or carrying on any trade or calling within the limits of the municipality. Sections 83 to 85 deal with appeals relating to and refund of taxes. Under Sub-section (7) of Section 83, an appeal against 'the assessment or levy of, or refusal to refund any tax under this Act' is to lie to the Deputy Commissioner or to such other officer as may be empowered by the Provincial Government in that behalf, Under Sub-section (1-A) of Section 83, any person aggrieved by the decision of the appellate authority has a right, within thirty days from the date of such decision, to apply to the State Government for revision of the decision on any of the two grounds mentioned in the said sub-section. Under Sub-section (2), if, on the hearing of an appeal or revision any question as to the liability to, or the principle of assessment of a tax arises on which the authority hearing the appeal or revision entertains a reasonable doubt, it may, either of its own motion or on the application of any person interested, draw up a statement of the facts of the case and the point on which the doubt is entertained, and refer the statement with its own opinion on the point for the decision of the High Court. This is not an obligatory duty but a matter of discretion with the appellate or revisional authority. Section 84 prescribes the period of limitation for filing an appeal. Under Sub-section (7) of Section 84, an appeal in respect of any tax has to be preferred within thirty days from the date when the demand for the tax was made or from the date on which the refund was refused, as the case may be. Sub-section (3} of Section 84 provides as follows:
(3) No objection shall be taken to any valuation, assessment, or levy, nor shall the liability of any person to be assessed or taxed be questioned, in any other manner or by any other authority than is provided in this Act.
9. Section 85 of the C.P. and Berar Municipalities Act, 1922, has been canvassed considerably before us and it is necessary to reproduce it in extenso. That section is in these terms:
85, (1) The Provincial Government may make rules under this Act regulating the refund of taxes, and such rules may impose limitation on such refunds.
(2) No refund of any tax shall be claimable by any person otherwise than in accordance with the provisions of this Act and the rules made thereunder.
Under Sub-section (7) of Section 85 of the Act rules have been made from time to time regulating the refund of taxes. We have first the rules made under Sections 76 and 85 regulating the remission and refund of the tax on buildings and roads imposed under Clause (a) of Section 66(-/). There is a separate set of rules under Section 85 regulating the refund of taxes. These rules under Section 85 are divided into three parts. The first part consists of rules 1 to 4. Under rule 1, every claim for refund of a tax has to be made within three months of the date on which the refund became due. Under rule 2, the Municipal Committee may, by a resolution passed at an ordinary meeting, dispose of such, claims or they may delegate the power to the finance sub-committee by a bye-law made under Section 24 of the Act. Rule 3, which was relied upon by the Division Bench in Muni. Committee, Halkapur v. Ballabhdas in order to arrive at a decision contrary to that given by their Lordships of the Supreme Court in Bhanat Kola, Bhandar's case, referred to above, is in the following terms (p. 731) :
' 3. If the refund of any tax is ordered by the Deputy Commissioner on an appeal under Section 83(1), the Municipal Committee shall carry out the order within a period of thirty days from the date of its receipt.'
Rule 4 deals with refund of octroi tax paid by the State Government and is not material. The second part contains the rules regulating the refund of terminal tax and the third part the rules regulating the refund of octroi tax. The rules regulating the refund of terminal ,tax and the refund of octroi tax prescribe further conditions to be complied with in order to entitle a person to obtain refund of these taxes. Having regard, therefore, to the provisions of these rules for refund made under Section 85, it would seem that the refund contemplated by these rules and Sections 83 and 85 is the refund of taxes which are to be paid in the first instance and do not seem to apply to a case where the tax has been assessed and levied and an opportunity was available to the assessee to dispute the liability at an earlier stage. We are, however, not concerned with determining this question finally in this petition nor concerned with specifying several cases in which an application for refund would lie under Section 83. The only question before us is whether an application for refund under Section 83 is maintainable and competent in respect of the amounts collected by a Municipal Committee in excess of the maximum limit prescribed by the constitutional provisions referred to above.
10. We first turn to the decision of the Supreme Court in Bharat Kala v. Municipal Committee. In this case, a tax was levied by the Dhamangaon Municipal Committee on persons carrying on the trade of ginning and pressing cotton by means of steam or mechanical process within the limits of that Municipality by a notification as from December 22, 1936. Subsequently in April 1941 the rates were revised and tax at enhanced rates was imposed. In December 1951, the Municipal Committee proposed to increase the rates of tax even further. Alarmed at this, the appellant and other factory owners in Dhamangaon instituted suits for recovery from the Municipal Committee of excess tax paid by them within three years of the dates of the respective suits. The two principal contentions which were raised before the Supreme Court on behalf of the Municipal Committee were: that (.1) the suit was bad for non-compliance with the requirements of Section 48 of the Act and (2) the provisions of Section 85(2) barred a suit for recovery of a tax wrongfully recovered by the Municipal Committee. Both these contentions were negatived. After holding that the impost in excess of the constitutional limits was ultra vires, their Lordships with reference to the first contention pointed out that the Municipal Committee had jurisdiction to recover an amount upto the constitutional limit, but it could not fairly be contended on its behalf that merely because of this, the recovery by it of an amount in excess of the constitutional limit was only irregular or at the worst illegal. The relevant observations on this point are in p. 80 of the judgment and are as follows: .Where power exists to assess and recover a tax up to a particular limit and the assessment or recovery of anything above that amount is prohibited, the assessment or recovery of an amount in excess is wholly without jurisdiction and nothing else. To such a case the statute under which action was purported to be taken can afford no protection. Indeed, to the extent that it affords protection, it would be bad.
11. With respect to the second contention that Section 85(2) of the Act bars a suit for recovery of a tax wrongfully recovered by the Municipal Committee, their Lordships first pointed out that this point was not urged by the respondents either at the time of the hearing of the suit or in the High Court, but as it was a question of considerable importance and might be raised in other similar suits which were said to be pending, they proposed to deal with it. The Court then in great detail and elaborately referred to the various decisions of Courts in India as also of the Privy Council. Their Lordships first pointed out that Sub-section (2) of Section 85 could be availed of only if the Act or the rules provided for making a claim for refund. Then they observed at p. 81 of the judgment:
'.. .The rules relating to refunds, if there are any, were, however, not placed before us. Nor was our attention drawn to any provision of the Act or to any rule which makes it obligatory upon a person to apply to the municipal committee for a refund of a tax. Even assuming that the Act contemplates obtaining a refund only upon compliance with rules made thereunder, does it contemplate cases where refund or repayment on the ground of the unconstitutionally of the levy It will be noticed that Sub-section (1) of this section empowers the State Government to impose by rules limitations on the refunds-presumably including limitation on the amount of refunds-and Sub-section (2) bars a claim for refund otherwise than in accordance with the rules made under Sub-section (1). These provisions cannot possibly apply to a case where the right to obtain a refund or repayment is based upon the ground that the action of the committee was in violation of a constitutional provision. To hold otherwise would lead to the startling result that what was incompetent to the State Legislature to do or authorise a committee to do directly can be permitted to be done indirectly by empowering the State Government to make rules for refund whereunder the amount of refunds could be so limited as to permit retention by the committee of the tax recovered by it in excess of the constitutional limit. In our view, therefore, Section 85 of the Act cannot, in any event, be said to provide a machinery for obtaining refunds in cases of this kind. Since Section 85 is inapplicable, a fortiori Section 83 cannot apply either. We must, therefore, proceed on the footing that the Act does not provide a machinery for making a claim for refund or repayment in such cases.'
12. It will thus be noticed that the decision does not merely proceed upon the footing that no rules regulating the refund had been framed under Section 85. It is no doubt true that these rules were not brought to the notice of the Court but the Court proceeded further to consider the case in the alternative footing whether, if such rules had been framed, they would in any manner affect the true position in law and the Supreme Court pointed out that the provision of the C. P. and Berar Municipalities Act under which rules could be framed could not possibly apply to a case where a suit to obtain refund or repayment was based upon the ground that the action of the Municipal Committee was in violation of the constitutional provision. The reason stated by the Supreme Court for arriving at this decision is that it would otherwise make it competent for the State Legislature to limit the amount of refund so as to permit retention by the Municipal Committee of the tax recovered by it in excess of the constitutional limit and thus enable it to do indirectly what it had no power to do directly. If the statutory provisions which confer the rule-making power do not enable the rule-making authority to frame such rules, then any rules framed by it which travel beyond the ambit of the rule-making power would, of course, be void. We have already referred to the rules made under Section 85 and not one of them deals specifically with the refund of a tax which has been levied in violation of a constitutional provision or in excess of the maximum limit prescribed by the Constitution.
13. Their Lordships then referred to Section 84(3) of the Act. They pointed out that there was no express mention of a civil Court in this sub-section, as, for example, there was in Section 67 of the Indian Income-tax Act and in this connection, they drew pointed attention to the provisions of Section 48 of the Act which provided for institution of a suit against a Municipal Committee in respect of 'anything done or purporting to be done under the Act.' They further observed (p. 82) :. We find it difficult to appreciate how taking into account an ultra vires provision which in law must be regarded as not being a part of the Act at all, will wake the assessment as one 'under the Act.' No doubt, the power to make an assessment is conferred by the Act and, therefore, making an assessment would be within the jurisdiction of the assessing authority. But the jurisdiction can be exercised only according, as well as with reference, to the valid provision of the Act. When, however, the authority travels beyond the valid provisions it must be regarded as acting in excess of its jurisdiction. To give too wide a construction to the expression 'under the Act' may lead to the serious consequence of attributing to the Legislature, which owes its existence itself to the Constitution, the intention of affording protection to unconstitutional activities by limiting challenge to them only by resort to the special machinery provided by it in place of the normal remedies available under the Code of Civil Procedure, that is, to a machinery which cannot be as efficacious as the one provided by the general law.
After considering' in detail the provisions of Sections 83 and 85 of the Act, their Lordships held that those provisions cannot be said to provide a sufficiently effective remedy to an assessee to challenge the assessment made against him or to a person who is aggrieved by the action of the Committee levying or refusing to refund a tax. They also pointed out that the provision for a reference to the High Court made by Sub-section (2) of Section 83 could not be said to be a sufficiently efficacious remedy for challenging the assessment made on an assessee, for, whether to make a reference or not was left to the discretion of the appellate or revisional authority and the Act did not confer upon the person aggrieved the right to move the High Court, as, for example, the Income-tax Act does.
14. With reference to the nature of the suit filed by the appellants in that case, their Lordships pointed out that what the appellant had claimed in the suit was the repayment by the Municipal Committee of an amount recovered by it in excess of that which under the Constitution it was competent to recover from the appellant. Their Lordships further pointed out that the appellant had not sought to modify or set aside any order made by an authority acting or purporting ,to act under the Act. The difference between the cases in which the special machinery provided under the Act must be resorted to and those cases where the party is entitled to have recourse to his ordinary remedy in the civil Court was pointed out by their Lordships in these words at p. 84 of the judgment: .There is a real distinction between those cases where a suit was held to be incompetent and the kind of cases which we have before us. Thus where the question merely is, whether the assessment had been made according to law, the Assessing Officer of the municipality having jurisdiction on the subject matter and over the assessee the provisions of Section 84(3) may be a bar to a suit. Where, however, the question raised is as to the jurisdiction of the Assessing Officer to proceed against the assessee and levy on or collect from him an amount in excess of that permitted by the Constitution, the matter would be entirely out of the bar of that provision. Here since the Assessing Officer had no authority to levy a tax beyond what Section 142A of the Government of India Act, 1933, permitted or what Article 270 permits his proceedings are void in so far as they purport to levy a tax in excess of the permissible amount and authorise its collection and the assessment order is no answer to the suit for the recovery of the excess amount. To this extent, even the order of assessment cannot obtain the protection of Section 84(3) of the Act and, therefore, the appellant's suit is maintainable.
15. Now, from the passages we have quoted above, it is clear that the question whether, in a case identical with the one before us, a suit was barred either under Section 84(3) or under Section 85(2) of the Act was directly before the Supreme Court in Sharat Kala Bhandar's ease and was expressly adjudicated upon by it. This judgment would be binding upon this High Court. In Muni, Committee, Malkapur v. Ballablidas, as mentioned above, a contrary view was, however, taken by a Division Bench of this Court. The reasons which prompted the Division Bench not to follow the judgment of the Supreme Court are set out in paras. 24 and 30 of its judgment, and those reasons were two-fold. The first was that the decision in Bharat Kala Bhandar's ease was directly opposed to the earlier decision of the Supreme Court in Firm Radha Kishan v. Ludhiana Municipality : 2SCR273 , which was not cited before the Supreme Court in the later case, The second was that the relevant provisions of the C.P. and Berar Municipalities Act were not brought to the notice of the Court.
16. We will now examine the correctness of these reasons and ascertain whether the Division Bench was justified on these grounds in refusing to follow the decision of the Supreme Court, in Bharat Kala Bhandar's case. Firm Radha Kishan v. Ludhiana Municipality was a case under the Punjab Municipal Act, 1911. Under the Punjab Government Notification No. 26463, dated July 21, 1.932, terminal tax was payable under item 68 of the Schedule to the said Notification at the rate of 3 pies per maund in respect of salt common and under item 69 at the rate of annas 10 per maund in respect of salt of all kinds other than common salt. The appellants in that case imported Sambhar salt into the octroi limits of the Ludhiana Municipality. The Municipal Committee collected terminal tax on the Sambhar salt so imported by the appellants at the higher rate under item 69 of the Schedule on the ground that it was not salt common and did not fall under item 68 of the Schedule. The appellant filed a suit against the Municipal Committee in the civil Court, Ludhiana claiming refund of the amount paid by them with interest. It was contended on behalf of the Municipal Committee that the Sambhar salt was not common salt and the civil Court had no jurisdiction to entertain the suit. The first thing to be observed about this judgment is that it does not deal with the provisions of the C.P. and Berar Municipalities Act with which the Division Bench in the case of Muni. Committee, Malkapur v. Ballabhdas, and we in. the present petition, are concerned. It deals with a different Act, namely, the Punjab Municipal Act. Secondly, the bare recital of facts itself shows that the question in Firm Radha Kishan's case was not with respect to the jurisdiction of the Municipal Committee to levy a tax, nor with respect to the constitutionality of a tax imposed by the Municipal Committee. The power of the Municipal Committee to levy a terminal tax upon the salt imported into the municipal limits by the appellants was not disputed. The contention only was that the incidence of tax was attracted under a different entry in the Schedule than that sought to be made applicable by the Municipal Committee. Thus, the question merely was as to the rate at which the appellants were liable to pay the terminal tax lawfully and constitutionally imposed by the Municipal Committee. The answer to that question depended upon the character of the salt imported by the appellants. This was a question of fact and had no reference to the taxing power of the Municipal Committee. In its judgment in Municipal Committee of Malkapur's case, the Division Bench referred with approval to certain observations of the Supreme Court in Firm Radha Kishan's case. These observations are summarised in the judgment of the Division Bench. Since the Division Bench relied upon these observations to reach the conclusion that the decision in Bharat Kala Bhandar's case was directly opposed to the earlier decision in Firm Radha Kishan's case, we feel it necessary to get out that particular passage in the judgment in extenso (p. 1549) :
It would be convenient at the outset to notice the relevant provisions of the Act, Under Section 61(2) the Municipal Committee has power to impose, with the previous sanction of the State Government, any tax which the State Legislature has power to impose in the State, subject to any general or special orders which the State Government may make in that behalf. The State Government issued the Notification No. 20403 dated July 21, 1932 to come into force from November 1, 1982 empowering the Municipal Committee to impose terminal tax at the rates shown in Col. 3 of the Schedule attached thereto upon the articles mentioned in Col. 2 thereof which are imported into or exported out of the municipal limits by rail or by road. The relevant items arc items 68 and 69. Item 68 is 'salt common' and the rate prescribed is 3 pies per maund; and item 69 is 'salt of all kinds other than common salt', and the rate fixed is As. 10/- per maund. Section 78 provides for a penalty if any person brings any article liable to the payment of terminal tax into the prescribed limits without paying the said tax. Section 84 gives a right of appeal against any levy or refusal to refund any tax collected under the Act to the Deputy Commissioner or such other officer as may be empowered by the State Government in that behalf; under Sub-section (2) thereof, if on hearing of an appeal under the section, any question as to the liability to, or the principle of assessment of a tax arises, on which the officer hearing the appeal entertains reasonable doubt, he may, either of his own motion or on the application of any person interested, state the case and refer the same for the opinion of the High Court; and after the High Court gives its opinion on the question referred to it, the appellate authority shall proceed to dispose of the appeal in conformity with the decision of the High Court. Under Section 86, the liability of any person to be taxed cannot be questioned in any manner or by any authority other than that provided in the Act; under Sub-section (2) thereof, no refund of any tax shall be claimed by any person otherwise than in accordance with the provisions of the Act and the rules thereunder. It will be seen from the aforesaid provisions that the power to impose a terminal tax and the liability to pay the same is conferred or imposed on the municipal committee and the assessee respectively by the provisions of the Act. The Act also gives a remedy to an aggrieved party to challenge the correctness of the levy or to seek refund of the same. Not only an appeal has been provided for against the order of the municipal committee levying the tax or refusing to refund the same, but the appellate authority is empowered to get an authoritative opinion of the High Court on any question as to the liability or on the principle of assessment; and on receiving such opinion, the said authority is bound to dispose of the appeal in the light of the said opinion. It is said that the reference provided to the High Court is in the discretion of the appellate authority and he can with impunity refuse to do so, even if any difficult question is involved in the appeal. The question is not whether a particular officer abuses his power, but whether a remedy is available under the Act or not. It cannot be assumed that an officer, though he entertains reasonable doubt on the question as to liability or on the principle of assessment, he will deliberately and maliciously refuse to do his duty; if he does, other remedies may be available. The Act also in specific terms debars any authority other than that prescribed under the Act from deciding the question of liability of any person to tax or his right to get refund of a tax paid. In short, the Act contains a self-contained code conferring a right, imposing a liability and prescribing a remedy for an aggrieved party. In such a situation, the question arises whether a Civil Court can entertain a suit for a refund of the tax wrongfully collected from an assessee; and if so, what are the limits of its jurisdiction
17. Now, the concluding sentence of the above paragraph will show that this passage does not contain the ratio of the judgment. What it merely does is to summarise and briefly set out the scheme of the Punjab Municipal Act and poses' the question which arose for determination of the Court. The ratio of the judgment in Firm Radha Kishm's case is to be found in para. 9 of the judgment and is as follows (p. 1551) :.Under the said Notification, read with S. 01 of the Act, the Municipal Committee is empowered to levy terminal tax on salt, whether it is common salt or not. The Committee has, therefore, ample power under the Act and the Notification issued by the State Government to impose the said tax. The only dispute was as regards the rate of tax payable in respect of the salt brought by the appellant into the limits of the Municipal Committee. The rate depended upon the character of the salt. The ascertainment of the said fact is necessary step for fixing the rate and it is not possible to say that in ascertaining the said fact the authorities concerned travelled outside the provisions of the Act. The learned counsel contends that if a municipal committee levies terminal tax on an article not liable to tax under the Act, a suit would lie and, therefore, the same legal position should apply even to a case where the municipal committee levies the tax in respect of an article under an entry not applicable to it. We do not see any analogy between these two illustrations, in the former, the municipal committee does not act under the Act, but in the latter it only commits a mistake or an error in fixing the rate of tax payable in respect of a particular commodity; one is outside the Act and the other is under the Act; one raises the question of jurisdiction and the other raises an objection to a matter of detail.
18. In the above passage the Supreme Court expressly points out that the dispute which arose in that ease was only with reference to the rate at which the tax was payable in respect of the salt brought by the appellants into the municipal limits; this depended upon the character of the salt imported and in ascertaining that fact the assessing authorities did not travel outside the provisions of the Act. They have further pointed out that there was no analogy between a case such as was before them arid a ease where the Municipal Committee levied terminal tax on an article not liable to tax under the Act. The case before them was one under the Act raising an objection to a matter of detail, while in a ease where tax was levied on an article not liable to tax under the Act the Municipal Committee would not act tinder the Act, but outside the Act and in derogation of the Act, and in such a case a suit would lie.
19. This is really the same principle as was again enunciated in Bharat Kola Bhandar's case. In Bharat Kola Bhandar's case after referring to and discussing the various authorities the Supreme Court came to the conclusion that , in the case before them the Municipal Committee was acting wholly beyond its taxing power and in violation of the constitutional restrictions and limitations; imposed upon it and in such a case a suit would lie. With great respect to the learned Judges constituting the Division Bench which decided the case of Municipal Committee of Malkapur, we must observe that the conclusion reached by them, namely that Bharat Kala Bhandar's case was directly opposed to Firm Radha Kishan's case, is not borne out on a reading of those two authorities. Even assuming there were some conflicting observations in these two authorities, since Bharat Kala v. Municipal Committee was a case directly in point dealing with the same Act and an identical notification as were before the Division Bench, the Division Bench was bound to follow that decision rather than a decision under another Act.
20. Coming now to the second reason given by the Division Bench for not following the Supreme Court decision in Bharat Kala Bhandar's case, namely, that , the relevant statutory provisions were not brought to the notice of the Court, it will be seen that the relevant provision referred to by the Division Bench was rule 3 of the Rules under Section 85 regulating the refund of taxes which we have reproduced above. Now, a perusal of rules 1 to 3 would show that these rules do not provide for cases in which a refund can be claimed or is allowable. They merely prescribe the procedure to be followed in making an application for refund and provide for a period of limitation within which the application has to be made and the manner in which the application has to he decided. Rule 3 is a rule which merely makes ancillary provisions as to what is to happen when an assessee succeeds in an appeal and thus becomes entitled to the refund of the amounts paid by him by way of tax. That rule provides that where on an appeal under Section 83(/) any refund of tax is ordered, the Municipal Committee has to carry out the order within a period of thirty days from the date of the receipt of the order. This rule, therefore, gives to the Municipal Committee a period of thirty days for complying with the order of the appellate authority and also gives it this period, if it feels aggrieved by the decision, to approach the State Government in revision. These rules, therefore, did not have any bearing on the question before the Division Bench. It is also not correct to say that the Supreme Court decision in Bharat Kala Bhandar's case was given per incuriam in view of the fact that these provisions were not brought to the notice of their Lordships of the Supreme Court. It is true that the Supreme Court did mention that the rules made under Section 85 were not brought to its notice, but, as we have pointed out above, the judgment makes it clear that they have held that a suit was maintainable and the application for refund did not lie not only because of the absence of any rules made under the rule-making power. They have gone to the very root of the matter and have pointed out that if any rules were in fact framed, they could not travel beyond the ambit of Sections 83 and 85, which sections themselves did not contemplate and could not in violation of the constitutional provision provide for making of rules in a case such as was before them and was before the Division Bench in Municipal Committee of Malkapur's case and as is before us in the present petition. As pointed out by their Lordships of the Supreme Court any such statutory provision would enable the State Legislature to achieve indirectly what it could not do directly by so limiting the right to obtain refund as to permit retention by the Municipal Committee of the tax recovered by it in excess of the constitutional limit and any such provision in the Act would be itself unconstitutional and ultra vires.
21. Ordinarily, we would have considered ourselves bound by the decision of a Division Bench of this Court inasmuch as it would be a Court of co-ordinate jurisdiction and if we differed from that decision, we would have thought it necessary to refer the matter to a larger Bench, But since the decision of the Supreme Court in Bharat Kola Bhandar's case is directly in point and interprets the very statutory provisions with which we are concerned and with which the Division Bench was concerned in Municipal Committee of Malkapur's case, and as the distinction sought to be drawn by the Division Bench is not justified and is not borne out on reading of the two Supreme Court decisions, we must consider ourselves bound only by the decision of the Supreme Court in Bharat Kala Bhandar's case and not by the decision of the Division Bench. It may also be pointed out that the majority judgment in Bharat Kala Bhandar's case was delivered by Mudholkar J., who was also a party to the judgment in Firm Radha Kishan's case. We, therefore, do not see any necessity of referring this case to a larger Bench. We hold that we arc bound by the decision of the Supreme Court in Bharat Kala Bhandar's case and that the ratio of that decision has not in any way been affected by the decision of the Division Bench in Municipal Committee of Malkapur's case. Accordingly, the application for refund made by the petitioners and the appeal filed by them were incompetent and not maintainable and the petitioners' proper remedy was to file a suit in a civil Court.
22. Mr. Manohar, learned advocate for the petitioners, next submitted that the word 'tax' in Sections 83 and 85(7) would apply not only to a tax levied validly under the Act but also to a tax purported to be levied under the Act and, therefore, the provisions of Sections 84(3) and 85(2) would apply also to a ease where a tax was levied contrary to the provisions of the Act and accordingly no civil suit could lie for the refund of amounts paid by way of such purported tax. Support was sought for this submission in the decision of the Supreme Court in Firm I. 8. Chetty & Sons v. State of Andh. Pra. : 50ITR93(SC) . It was submitted by Mr. Manohar that this decision was not brought to the notice of the Supreme Court in Bharat Kala Bhandar's case. It is not possible to accept these submissions. As we have pointed out, the definition of 'tax' in Clause (a) of Section 3 of the Act refers to the various types of taxes specified in Section 66. Under Section 66(7) what can be levied is a tax which a Municipal Committee has the power and the constitutional authority to levy. The definition of the word 'tax' in Clause (ii) of Section 3 of the Act does not include a tax which by the Constitution or the statute the Municipal Committee is prohibited from levying. If the phrase 'anything done or purporting to be done under this Act' in Section 48 of the Act cannot include the case of recovery of a tax imposed in contravention of the constitutional provisions or in excess of the taxing power of the Municipal Committee as held by the Supreme Court in Bharat Kala Rhandar's case, the word 'tax' in Sections 88 and 85 cannot also be construed as including a tax purported to be levied in violation of the constitutional provisions and without jurisdiction. It may also be pointed out that in p. 82 of the judgment in Bharat Kala Bhandar's case the decision in Firm I. S. Chetty & Sons v. State of Andh. Pra. has been expressly referred to, the relevant passage therefrom quoted in extenso and the true ratio of that decision explained.
23. In the view we take of the matter, it is not necessary to consider the other grounds upon which the petitioners' applications for refund and appeal filed by them, were held to be incompetent by the State Government nor is it necessary to consider the other contentions which were raised by the Municipal Committee before the appellate and the revising authorities. In their return filed in the present petition, respondents No. 2, Municipal Committee, have contended that the petitioners' application for refund was barred by limitation as according to respondents No. 2, the petitioners came to know about the mistake of law relied upon by them when they filed the said Special Civil Application No. 304 of 1966 on April 15, 1966. It is also not necessary to decide this point since we have held that the application for refund itself was incompetent and not maintainable and the proper remedy of the petitioners was to file a suit in a civil Court. 'We may also point out that in this judgment we are not concerned with what the period of limitation for filing such a suit would be or with the question as to the period for which the petitioners would be entitled to the refund, if any, of the excess amounts paid by them.
24. The result, therefore, is that this petition fails and is dismissed and the rule is discharged. In view, however, of the fact that the petitioners in filing their application for refund were relying upon a Division Bench judgment of this Court, there will be no order as to costs of this petition.