S.T. Desai, J.
1. This second appeal raises the question of the vires, of a 'tax on octroi refunds', also called 'tax on refund', collected by the Poona Municipal Corporation and also questions of maintainability of the suit and bar of limitation. The appellant-plaintiff filed a suit against the', respondent-defendant, the Poona Municipal Corporation, to recover a sum of Rs. 7,814-15-0 alleging that the amount had been illegally retained by the defendant Corporation as 'tax on refund' and that he was entitled to recover that amount in circumstances which we shall immediately set out. At all material, time, the plaintiff worked as a commission agent for numerous persons whose goods passed through the limits of the Poona City Municipality. The Provincial Municipal Corporations Act of 1949 was applied to the Poona City on February 15, 1950, and prior to the coming into operation of that Act, the Poona City Municipality was governed by the Bombay Municipal Boroughs Act of 1925. Prior to that, the Poona City Municipality was governed by the District Municipal Act of 1901. According to the plaintiff, it was not within the powers of the Poona City Municipality after the application to it of the Provincial. Municipal Corporations Act of 1949 to levy any 'tax on refund' as it had previously been doing. Prior to February 1950, the Poona City Municipality was-following a particular practice in the matter of octroi duty. It was entitled to levy octroi duty, but not on goods in transit. The practice in respect of goods in transit that was followed was to collect the octroi duty at a Municipal naka when the goods entered the Municipal limits and to treat that as a deposit and later give a refund. The goods were regarded as goods in transit if they were exported within seven days next after the date of their import. The claim for refund had to be made within seven days from the date of their export. Really, the whole amount of octroi duty should have been refunded in such cases of goods in transit, but what the Municipality did was that it refunded 90 per cent. of the amount of the deposit and retained the balance of 10 per cent. on the ground that it was entitled to retain 10 per cent, of that amount as 'tax on refund', which tax, as we shall presently point out, it had been authorised to levy under earlier legislation. One of the contentions of the plaintiff who sued as 'a claimant' within the meaning of that expression under the rules of the defendant-Corporation was that the tax on refund which the Corporation claimed and on the basis of which it contended that it was en-titled to retain 10 per cent. of the amount of the deposit, was ultra vires the Municipal Corporation, and, therefore, the plaintiff was entitled to a refund not only of 90 per cent. but of the full amount of octroi duty paid by his constituents in respect of goods in transit.
2. The defendant-Corporation raised a number of contentions and various issues were raised in the trial Court. It was held by that Court that the plaintiff being a claimant had a right to maintain the suit. It also held that the suit was not barred by limitation. That Court, however, held that the imposition of ' tax on refund' and retention of the amount of 10 per cent. of the deposit in enforcement of the tax was within the competence of the defendant-Corporation and dismissed the plaintiff's suit.
3. In an appeal against that decree of dismissal, the learned Assistant Judge, Poona, held that the imposition of that tax was ultra vires the defendant-Corporation; He, however, took the view that as it was not the plaintiff, who had paid the amounts of the deposits in respect of which he had brought the suit and although he was 'a claimant', he had no right in law to maintain the suit for the balance of the 10 per cent. of octroi duty. The lower appellate Court also held that the plaintiff's suit was barred by limitation. The appeal was dismissed and the plaintiff has come to this Court in this second appeal.
4. Before we examine the arguments urged on either side, it will be convenient to refer to the various provisions of the Municipal Acts and the Rules under the same to which our attention has been drawn. Section 59 of the Bombay District Municipal Act, 1901, provided for imposition of tax and the Poona City Municipality, as we have already mentioned, was governed by that Act. It was incumbent on the Municipality before imposing any tax to follow the preliminary procedure required by Section 60 of that Act. It was also incumbent on the Municipality being a City Municipality to obtain the sanction of the Governor-in Council to any tax which it proposed to levy. The taxes which the Municipality could levy under the Bombay District Municipal Act were enumerated in Sub-clauses (i) to (xi) of Clause (b) of Section 59. Sub-clauses (iv) and (xi) of that clause were as under:
iv) an octroi on animals or goods, or both, brought within the octroi limits for consumption, use or sale therein;...
(xi) any other tax....
It is abundantly clear that it was only after following the preliminary procedure and obtaining the requisite sanction that the Municipality had imposed an octroi duty on goods brought within the octroi limits for consumption or use therein. Where the octroi duty was collected in case of goods in transit, the City Municipality used to make a refund of the same. Then, the City Municipality decided to obtain the sanction of the Government to enable it to refund only 90 per cent, of the amount of duty so collected in case of goods in transit and to retain the balance of 10 per cent, of that deposit to enable it to finance its administration. The Governor-in-Council gave sanction to the Municipality to levy a tax described as a 'tax on octroi refunds'. That was in accordance with the provision contained in sub-cl, (xi) of Clause (b) of Section 59. The tax on octroi refunds continued to be collected till 1926 in pursuance of the provisions of the Act of 1901 to which we have already made reference. The Bombay Municipal Boroughs Act of 1925 came into force and it was applied to the Poona City Municipality in 1926. Proviso (b) to Section 5(1) of that Act is as under:
5. (1) The provisions of the Bombay District Municipal Act, 1901, shall not apply to any Municipal District included or hereafter included in Schedule I from the date of such inclusion:
(b) any appointment, notification, notice, tax, order, scheme, licence, permission, rule, by-law or form made, issued or imposed under the Bombay District Municipal Act, 1901, in respect of a municipal district included or hereafter included in Schedule I, so far as is not inconsistent with the provisions of this Act, and any appointment, notification, order, scheme, rule, by-law or form made or issued under any other law in respect of such district shall continue in force and be deemed to have been made, issued or imposed under the provisions of this Act or of such other law in respect of the municipal borough constituted by such inclusion unless and until it is superseded by any appointment, notification, notice, tax, order, scheme, licence, permission, rule, bylaw or form made or issued under this Act or such other law.
It was by virtue of the operation of that proviso that the Poona City Municipality continued to recover the tax on octroi refunds as before. It did not supersede the same. Nor was it superseded by any legislation. That position continued till February 15, 1950, when the Bombay Provincial Municipal Corporations Act of 1949 was made applicable to the Poona City Municipality which from that date became the Municipal Corporation of Poona.
5. There were rules and by-laws framed under the Bombay District Municipal Act of 1901 and the Bombay Municipal Boroughs Act of 1925 for levy and refund of octroi duty. 'Goods in transit' is defined in Rule 2(1) to mean 'goods exported within seven days next after their import'. The definition of 'claimant' under Rule 2(g) is as under
A claimant is one who produces the duly receipted import bill and the corresponding export certificate.
Rule 4 relates to imposition and nature of tax and class of property made liable thereto. Sub-rule (3) lays down that the tax shall be payable to the Import Naka Karkun at the time of import on his tendering an import bill for the same. There is an important proviso to that Sub-rule and it is as under:
Provided that the duty paid on 'goods in transit' shall be treated as 'deposit' if such goods be taken out of the municipal limits within seven days from the date of importation.
Rule 6 requires that every naka karkun should, whenever goods are brought to his naka, prepare an import bill by ascertaining and noting certain particulars. Those particulars include the 'name of the owner or the person in charge of the goods'. Rule 11 relates to 'refund' and is as under:
Refunds of the amounts paid on imported goods shall notwithstanding that such goods, since their import may have broken bulk or changed hands, be made from the Municipal fund in the cases and subject to the following conditions:
Sub-rule (2) of Rule 11 is as under:
Except as aforesaid no refund shall be made in respect of goods unless:-
(1) The amount of octroi paid on the goods in respect of which refund is claimed was not less than one rupee, except in the case of goods in transit and in the case of -payments under protest under Rule 6(k).
This is one of the four conditions on which being satisfied the Municipality was bound to make refund of the amount paid on imported goods. Two other conditions are not material for our purpose. The fourth condition is:
The claimant has produced a duly receipted import bill and an export certificate relating to such goods.
It is the case of the plaintiff before us that the conditions subject to which refund had to be made to him as 'a claimant' were all fulfilled and, therefore, he was entitled to a full refund of the amount of octroi duty paid by his constituents in respect of goods in transit. Rule 18 also relates to refund; by the Chief Officer to persons producing export certificate. Sub-rule (1) of Rule 18 lays down:
Refunds shall be made by the Chief Officer of the Municipality, or if authorised by him, by the Superintendent of Octroi, without reference to higher authority subject to the following conditions:
and then a number of conditions are laid down. One of those conditions is that the 'claimant' must produce with the application (1) the receipted import bill and (2) an export certificate relating to such goods. Another condition is that the export of such goods must have taken place within six days in the case of goods in transit.
Sub-rule (3) of Rule 18 is as under;
A deduction of ten per cent. shall in all cases be made before refunding the amount of octroi duty on exportation of goods either in transit as per Rule 13 or otherwise under Rule 11(2).
This deduction of 10 per cent, it is common ground, was in respect of the tax on octroi refund sanctioned by the Governor-in-Council.
6. The Bombay Provincial Municipal Corporations Act, 1949, defines ' Octroi to mean
a cess on the entry of goods into the limits of a city for consumption, use or sale therein.
Section 127 of that Act empowers the Corporation to impose taxes which are enumerated there. Sub-section 2(a) of Section 127 specifically mentions 'octroi' as one of those taxes. Sub-section 2(1) lays down that the Corporation, under the Act, can impose
any other tax which the State Legislature has power under the Constitution to impose in theState.
Sub-section (4) of that section rules:
Nothing in this section shall authorise the imposition of any tax which the State Legislature has no power to impose in the State under the Constitution.
7. Under the Constitution the State Legislature does not have the power to impose, any 'tax on octroi refunds' and its power under entry 52 in List II of the Seventh Schedule, which is the relevant entry for octroi, is confined to 'taxes on the entry of goods into a local area for consumption, use or sale therein' and obviously does not extend to goods in transit. Having regard to the provisions of Section 127, the learned Judge below felt compelled to hold that the defendant-Corporation had no right to levy octroi on goods in transit and no right to retain 10 per cent. of the duty collected by it.
8. It has been conceded before us by Mr. Gokhale and it seems hardly disputable that the State Government has no power under the relevant Lists in Schedule VII of the Constitution to impose any tax of the nature of a tax on octroi refund. Cadit questio the City Municipality is not competent to do so. It would seem that sanctioning of the 'tax on octroi refunds' under earlier legislation was an indirect manner of permitting the City Municipality to-retain 10 per cent. of the amount of octroi duty collected on goods in transit which but for that sanction it could not have retained and would have been bound to refund. Under the Act of 1901 it was, however, possible for the Governor-in-Council to sanction the imposition of such a levy and Section 5 of the Act of 1925, as we have already pointed out, had the effect of saving the imposition and collection of the 'tax on octroi refunds'. But the Act of 1949 does not permit of any such imposition and as we shall presently point out there is in it no 'saving' of the wide nature contained in Section 5 of the Act of 1925 which had the effect of permitting the Poona City Municipality to continue to recover the tax on octroi refunds. It is extremely difficult for us, therefore. to see how in the changed position in the law, it was competent to the Municipal Corporation to levy and recover any tax on octroi refunds or for that purpose to seek to retain with it 10 per cent. of the amount of octroi duty in respect of goods in transit which it was bound to refund in full. But, says Mr. Gokhale, the tax that was levied and continued to be levied prior to February 1950 was a tax lawfully imposed and it has been saved by the 'Transitory Provisions' of the Bombay Provincial Municipal Corporations Act of 1949 contained in Appendix IV of that Act. Before we set out the particular provision relied on by learned Counsel, we may refer to Section 490 of that Act. Section 490 of that Act repealed the Bombay District Municipal Act, 1901, the Bombay Municipal Boroughs Act, 1925, and certain other legislation relating to Municipal administration. Obviously it was necessary that all acts done under the provisions of those enactments and the rules and bye-laws made thereunder, the notices given thereunder and taxes levied and recovered thereunder and other matters relating to licence etc. had to he saved and Clause (5) of the Transitory Provisions on which Mr. Gokhale has so strongly relied did no more than operate as a saving of those acts, notices, taxes etc. Clause (5) of the Transitory Provisions is as under;
5. Save as expressly provided by the provisions of this Appendix or by a notification issued under paragraph 22 or order made under paragraph 23,-
(a) any appointment, notification, notice, tax, order, scheme, licence, permission, rule, by-law, or form made, issued, imposed or granted under the Bombay District Municipal Act, 1901, or the Bombay Municipal Boroughs Act, 1925, or any other law in force in any local area constituted to be a City immediately before the appointed day shall, in so far as it is not inconsistent with the provisions of this Act, continue in force until it is superseded by any appointment, notification, notice, tax, order, scheme, licence, permission, rule by-law, or form made, issued, imposed or granted under this Act or any other law as aforesaid as the case may be;...
The brief argument here is that the 'tax on octroi refunds' had been imposed under the earlier legislation and it is not inconsistent with any of the provisions of the Act of 1949, and not having been superseded by any provisions of the Act of 1949 or any other]aw, it continues in force. The argument is untenable because 'tax on octroi refunds' is palpably inconsistent with the provisions of Section 127 to which we have already made reference. There is no dispute that the State Legislature has no power under the Constitution to impose a tax on octroi refunds and it necessarily follows that the Municipal Corporation has no power under Section 127 to impose a tax on octroi refunds. The Act was applied to the defendant-Corporation on February 15, 1950, and from that date it was wholly outside the competence of the defendant-Corporation to impose and collect this levy, and if it chose to do so, that was manifestly inconsistent with the powers conferred on it under Section 127 and, therefore, ultra vires the Corporation. Mr. Gokhale drew our attention to certain taxation rules under the Act of 1949. It is difficult to see how any of those rules can touch the present question of the vires of the Corporation in imposing the tax impugned by the plaintiff.
9. It is next urged that the impugned tax was saved by the provisions of Article 277 of the Constitution. That article contains certain Savings. It lays down inter alia that any tax which was being lawfully levied by any Municipality before the commencement of the Constitution may, notwithstanding that such tax is mentioned in the Union List, continue to be levied and to be applied to the same purposes until provision to the contrary is made by Parliament by law. This article has no bearing on the controversy before us. It saves existing taxes levied by any Municipality on subjects which may have been transferred by the Constitution from the State List to the Union List. In the case before us it is not possible to say nor has it even been suggested that a tax on octroi refunds was by the Constitution transferred from the State List to the Union List or has been mentioned in the Union List. There is no question here of any challenge to the validity of the tax on the ground of the subject-matter having ceased to be within the competence of the State by operation of the Constitution. The challenge is on a wholly different ground, and that ground as already discussed by us is that the State Legislature itself has under the Act of 1949 restricted the power of the Corporation in a manner which does not permit of any imposition on goods in transit or of the nature of a tax on refunds. Section 5 of the Act of 1925 had the effect of saving that tax on refunds. But the Act of 1949 did not contain any such extensive saving and only saved such taxes, rules and bye-laws as were not inconsistent with the provisions of the Act. There is nothing in the Constitution which has hit the impugned tax and Article 277 has no bearing on this question of vires. It is the Act of 1949 which has deprived the Poona City Municipality of the power it had to impose that tax, and that tax not having been saved, the Poona City Municipality was not competent to levy or collect it after the Act was applied to it in February 1950.
10. For reasons already stated we are satisfied that the learned Judge below was right in the conclusion reached by him that the imposition of the tax on octroi refunds by the defendant-Corporation after February 1950 was ultra vires the powers of the Corporation and illegal and ineffective. Therefore, the recovery of that tax was also illegal and the Municipality was bound to refund any amount recovered by it in enforcement of that tax. It must follow that the Municipality was in law not entitled to retain 10 per cent, of the amounts deposited with it in respect of octroi on goods in transit.
11. To turn to the argument urged before us on behalf of the appellant. It is possible to state that argument very succinctly. The plaintiff is 'a claimant' within the definition of that expression in Rule 2(g) of the rules and bye-laws under the Acts of 1901 and 1925 and there is no dispute that the goods on which octroi duty was paid and in respect of which the refund is claimed were goods in transit. The plaintiff has been refunded 90 per cent. of the octroi duty paid on those goods in transit and the balance of 10 per cent. remains deposited with the defendant-Corporation and it is obligatory on the Corporation under Rule 11 to refund that balance of 10 per cent. to the plaintiff, he being 'a claimant' in respect of the same having produced the duly receipted import bill and the corresponding export certificate. According to the plaintiff, his cause of action further is that the defendant-Corporation has wrongfully withheld repayment of that amount in the alleged exercise of a right vested in it to levy tax on octroi refunds but that tax is ultra vires the defendant-Corporation and, therefore, the defendant-Corporation is bound to make a refund to the plaintiff of that balance of 10 per cent. of the octroi duty paid to the defendant-Corporation. The learned Judge below took the view that a person was 'a claimant' under the relevant rules only for the purpose of receiving refund and not for the purpose of filing any suit or taking any legal proceedings for the recovery of the amount of that refund. Now, at first blush, that argument does seem a little attractive. A refund would normally be claimable by a person who has paid the amount of which refund is sought, and in the absence of any proper authorisation by a power of attorney or any other legal mode or an assignment duly made, a person cannot ask for a refund of moneys paid by another party. But, the position under the Rules and Bye-laws of the Municipal Acts is wholly different. The amount of octroi duty is paid to the defendant-Corporation no doubt either by or on behalf of the owner of the goods, but the defendant-Corporation does not concern itself with tie owner or ownership of the goods on which it charges octroi duty. The octroi duty is payable at the import naka and may be paid by the owner of the goods or any person in charge of the goods and all those persons mostly would be from places at some distance from Poona and in many cases from places far from Poona. It would be very inconvenient for those persons whose goods were merely passing through the limits of the defendant-Corporation to recover the amounts of the refund of octroi duty which they were really not bound to pay but had to pay as deposit. The procedure adopted by the defendant-Corporation itself, and laid down and sanctioned by its rules and bye-laws, to meet with this situation, was that the refunds should be paid and could be claimed only by a person who was 'a claimant' and the definition of 'claimant' is, as we have already mentioned, that he should be the person who has produced duly receipted import bill and the corresponding export certificate. That person alone would, under the Rules and Bye-laws to which we have already made reference, be entitled in law not merely to receive but also to recover the amount of refund from the City Corporation. Therefore, it is in the context of those rules and bye-laws, which the defendant-Corpo-ration has itself to observe, that this point of the right of the claimant to sue for refund has to be decided by us. It seems to us that there is substance in the case of the appellant that he was entitled to sue for the refund of the amount in suit from the defendant-Corporation.
12. It has, on the other hand, been argued by Mr. Gokhale, learned Counsel for the respondent-Corporation, that Rule 18 lays down that
a deduction of ten per cent. shall in all cases be made before refunding the amount of octroi duty on the exportation of goods...in transit.
Now, that rule has little relevance to the question before us. It merely relates to the mode or machinery whereby the levy of tax on octroi refund was to be collected by the defendant-Corporation. It does not affect the position or the right of the claimant to recover from the defendant-Corporation the whole amount of refund in respect of goods in transit.
13. Mr. Gokhale has drawn our attention to a decision of the Allahabad High Court, Jaunpur Municipality v. Banwari Lal : AIR1939All623 , and very strongly relied on certain observations in that judgment. It seems to us that the learned Judge below, in following that decision, failed to appreciate the facts of that case and to see that the observations there made were in a different context. They do not lend support to the contention of the defendant-Corporation. In that case, a suit was brought by the plaintiff to recover certain amount as refund of octroi duty under the Rules laid down in the Municipal Accounts Code. Between May 14 and 18, 1937, a number of persons in Jaunpur despatched goods outside the Municipal limits. As octroi duty would have been leviable on those goods if they had been imported within the municipal limits, the exporters became entitled to receive a refund of the amount of that octroi duty under Rule 178 of that Code. That Code prescribes a certain procedure for obtaining payment of refund. Rule 184 of that Code lays down that the applications for refund shall be filled in the prescribed form signed by the exporter or his representative authorised in writing in that behalf. The applications could then be presented by the exporter in person or by a representative of the exporter. The plaintiff had nothing to do with the preparation or presentation of those applications for refund, nor was his name mentioned in column 4 of those applications as the person to whom according to the Rules payment could be made. There was, however, in each application an endorsement at, the end containing a request to the Municipal Board to pay the refund duty to the plaintiff. It is clear, therefore, that the position of the plaintiff in that case was quite different from the position of a claimant under the rules and bye-laws with which we are concerned in this appeal. It was held in that case that the plaintiff was not an agent or representative of the owner of the goods for the purpose of enforcing any right on their behalf. He was merely authorised to receive payment of the amount mentioned in those applications, and in the absence of any writing in his favour, he had no locus standi in the matter and could not sue the Municipality. Now, the facts of the case before us are wholly different and the decision so strongly relied on does not advance the defendant's contention. The meaning and effect of the statutory rules to which we have already made reference, it is abundantly clear, is to cast on the Municipality the obligation and the duty to refund the amount of octroi duty collected in case of goods in transit to the 'claimant'. The rules do not recognize the owner of the goods as such in the matter of refunds. Where octroi duty is collected on goods in transit from the person in charge of the same when they enter a municipal naka, be he owner of the goods or not, it is to be treated as deposit, and if the goods are taken out of the municipal limits within seven days of importation, the amount so collected has to be refunded to the 'claimant'. Only, the 'claimant' has under the statutory rules the legal right to claim refund on fulfilment of the specified conditions and the Municipality gets a full discharge of its liability on refunding the amount to the'claimant'. That is the speciality of the whole matter. Failure on the part of the Municipality to refund the amount in such a case must, therefore, result in the accrual of a cause of action in favour of the 'claimant' and no other person. The claimant may or may not be the owner of the goods. He need not be the owner. We see no reason, therefore, for acceding- to the contention that the plaintiff was not entitled to maintain this suit in his own name. In our opinion, the learned Judge below was in error when he non-suited the plaintiff on that ground.
14. It was next urged by Mr. M.S. Sanghvi, learned Counsel for the appellant, that the suit was filed within the period prescribed by the law of limitation and the lower appellate Court was in error in holding that it was beyond time. The suit was for the recovery of the amount of 10 per cent. which according to the plaintiff had been wrongfully deducted by the defendant-Corporation in respect of goods in transit between February 15, 1950, and September 14, 1950. The plaintiff gave notice to the defendant as required by law and filed the suit on June 4, 1951. As to the starting point of limitation, the contention was that it was October 27, 1950, when the defendant refused to pay the amount, of deductions, refund of which was claimed by the plaintiff. Both the trial Court and the lower appellate Court took the view that the special provision relating to limitation in Section 487 of the Act of 1949 governed the case. The trial Court, however, on the facts took the view that it was not beyond time, whereas the lower appellate Court reached the conclusion that it was beyond time and dismissed the suit also on that ground. It is contended for the appellant that Section 487 of that Act has no application to the case and that the suit is for moneys had and received and Article 62 of the Limitation Act governs it. The argument before us has turned only on the question whether Section 487 has application to the plaintiff's case. It is not disputed that the suit must be held to be within time if it is not governed by that section.
15. The whole strength of the defendant's argument on this point of limitation depended upon an insistence that the deduction of 10 per cent. of the amounts of octroi duty in respect of the goods in transit were made and the amounts were retained in pursuance of the rules and bye-laws of the Corporation and the argument rested here, as in the Courts below, on Section 487 of the Bombay Municipal Corporations Act, 1949, the material part of which is as under:
(1) No suit shall be instituted against the Corporation or against the Commissioner, or the Transport Manager, or against any municipal officer or servant, in respect of any act done or purported to be done in pursuance or execution or intended execution of this Act or in respect of any alleged neglect or default in the execution of this Act:-
(a) until the expiration of one month next after notice in writing has been, in the case of the Corporation, left at the chief municipal office and, in the case of the Com-missioner or of the Transport Manager or of a municipal officer or servant delivered to him or left at his office or place of abode, stating with reasonable particularity the cause of action and the name and place of abode of the intending plaintiff and of his attorney, advocate, pleader or agent, if any, for the purpose of such suit, nor
(b) unless it is commenced within six months next after the accrual of the cause of action.
It was urged on behalf of the appellant-plaintiff that part of the cause of action was that the imposition of the tax on octroi refunds was ultra vires the Corporation and that the Corporation was illegally withholding the amount of 10 per cent. of the octroi duty paid by the constitutents of the plaintiff; and that collection of the same was beyond the competence of the defendant-Corporation as the imposition of the tax was ultra vires the defendant-Corporation. Being ultra vires and illegal, the act of wrongful recovery of that tax and the retention of that amount, so the argument proceeded, cannot be said to be 'an act done or purported to be done in pursuance of or in execution or intended execution' of the Act. There is, in our judgment, considerable force in this argument. It is unnecessary to examine this argument with any elaboration since the point may be said to have been set at rest so far as this Court is concerned by a decision of this High Court in Jalgaon Mun. v. Khandesh Spg.etc. Co. : AIR1953Bom204 , in that case, this Court was examining similar provisions in Section 206 of the Bombay Municipal Boroughs Act. The words, which the Court had to consider, were 'done or purporting to have been done in pursuance of this Act'. It will be seen that they were in pari materia. The test whereby a distinction could be drawn between ultra vires and illegal acts of a Corporation on the one hand and those purporting to be done in pursuance of the Act on the other, as it was pointed out by Mr. Justice Bhagwati (as he then was) in that case, is quite well-known. His Lordship observed (p. 69) :. The distinction is really between ultra vires and illegal acts, on the one hand, and wrongful acts, on the other-wrongful in the sense that they purport to have been done in pursuance of the Act; they are intended to seem to have been done in pursuance of the Act and are done with a vestige or semblance of authority, or sort of a right invested in the party doing those acts. If the defendants, therefore, not having the power to levy octroi duty at all, either wholly or in regard to some classes of goods, had purported to levy the same, it would certainly have been an act which was outrageous and extraordinary, with not a vestige or semblance of authority, or not even a shadow of a right.
In that case, the controversy did not touch the vires of imposition of any tax by the Municipality but turned on the question whether 'oils used for machinery' fell within an item in Clause 3 of Schedule A of that Act, and it was held that the act of the Municipality in recovering octroi duty on the goods in question was not beyond the powers of the Municipality. The ultima ratio of that judgment can clearly be gathered from the observations we have quoted above and we are in respectful agreement with those observations. A rather feeble attempt was made by Mr. Gokhale to distinguish that authority and persuade us to take the view that the case before us is not touched by the principle which was reiterated by Mr. Justice Bhagwati in that case. We are unable to accede to the suggestion that in the present case, the act of the Municipality can be regarded as done or purporting to have been done in pursuance of the Act, In our judgment the suit is not governed by Section 487 of the Bombay Municipal Corporations Act and the learned Judge below was in error in dismissing it on the ground that it was barred by limitation.
16. In the result, the appeal succeeds. There will be a decree for the plaintiff for Rs. 7,364-15-0 with interest thereon at 4 per cent. from the date of the suit and interest on judgment at 4 per cent. with costs throughout.