Kunhi Raman, J.
1. An interesting question of law is raised in this second appeal to appreciate which the facts must be briefly stated. The South Indian Railway Co. Ltd., who are the appellants own properties at Mandapam. These were situated within the territorial limits of a local authority which until 1930 was known as the Pamban Union and for some time subsequently as the Pamban Panchayat Board. This Board comprised the revenue' villages of Pamban and Mandapam. By a notification published by the Madras Government in accordance with law on the 6th September, 1935, the revenue village of Pamban was excluded from the limits of this local body which was renamed Mandapam Panchayat Board. In effect there was then a bifurcation of what used to be known as the Pamban Panchayat Board into the Mandapam Panchayat Board and the Pamban Panchayat Board. There is no doubt that the properties owned by the appellant Railway Company and with which the present case is concerned are situated within the local limits of the Mandapam Panchayat Board. Prior to 1935 the 'house' tax for these properties used to be levied by the Pamban Union and the appellant company was paying such taxes. According to Section 135 of the Indian Railways Act (IX of 1890),
A railway administration shall not be liable to pay any tax in aid of the funds of any local authority unless the general controlling authority has by notification in the Official Gazette, declared the railway administration to be liable to pay the tax.
2. This section has been modified by Act XXV of 1941 known as the Railways (Local Authorities Taxation) Act, of 1941. The amendment is however not of importance for the purposes of this second appeal. During the continuance of the local authority known as the Pamban Union there was a notification issued by the Government of India under this section. This has been marked as Ex. 1 at the trial. According to this notification..the Governor-General in Council is pleased to declare that the administration of the South Indian Railway shall be liable to pay in aid of the funds of the local authorities specified in the first column of Schedule I annexed hereto the taxes specified in the corresponding entry in the second column thereof.
3. The local authority mentioned in the first column of the Schedule was the Pamban Union and the tax was described in the notification as house tax. Until the notification published by the Government in 1935 which made territorial changes in the Pamban Union the appellant Company was duly paying house tax to that Union, After the notification of 1935 which removed the revenue village of Pamban from the jurisdiction of this local authority and renamed the local authority as Mandapam Panchayat Board, the appellant Railway Company continued to pay property tax to the newly designated Mandapam Panchayat Board until the end of the second year of 1937-38. Subsequent to that half year, the appellant company refused to pay house tax to the Mandapam Panchayat Board for the reason that after the renaming of the local authority as Mandapam Panchayat Board there was no fresh notification published by the Government of India in accordance with the provisions of Section 135 of the Indian Railways Act in which the newly constituted Panchayat Board and the tax are both mentioned. According to the appellant company, unless and until such a notification is published by the Government of India, it is not open to the Mandapam Panchayat Board to claim any house tax from it. On the appellant company refusing to pay the tax, the suit from which this second appeal arises was filed by the Mandapam Panchayat. Board for recovering house tax for six half years commencing from the end of the second half year of 1937-38, the total amount of the claim being Rs. 1,575. The objection raised on behalf of the appellant company was pressed in both the Courts below which have overruled it holding that since the Mandapam Panchayat Board so far as appellant's properties are concerned is the same local authority which used to be known as the Pamban Union with a slight re-arrangement of the villages comprised in it, there is no necessity for a fresh notification by the Government of India under Section 135 of the Indian Railways Act to entitle the plaintiff-Board to collect the tax from the appellant company. This view taken by both the Courts below is challenged in second appeal on behalf of the appellant Railway Company.
4. The circumstances in which the local authority known as Pamban Union was renamed as Mandapam Panchayat Board are referred to in detail in the judgments of the Courts below and it is not necessary to repeat them here. Suffice it to say that subject to the technical objection raised under Section 135 of the Indian Railways Act, the Mandapam Panchayat Board is the proper local authority now for collecting house tax in respect of the properties belonging to the appellant Railway Company which are situated at Mandapam and in respect of which the present claim is made by the local Board. The point for determination is whether according to the provisions of Section 135 of the Indian Railways Act the Mandapam Panchayat Board has not become entitled to claim house tax from the appellant company by reason of the fact that there is no fresh notification published under Section 135 of the. Indian Railways Act in which this local authority and the tax concerned are specifically mentioned.
5. The Courts below have taken the view that although there was bifurcation of the, Pamban Panchayat Board into two different Panchayat Boards, yet so far as plaintiff's liability is concerned since the same local authority as defined in the Local Boards Act of 1920 without any substantial change in its constitution but only in its territorial limits is demanding payment of the tax the appellant company is liable to pay the tax even in the absence of a fresh notification under Section 135 of the Indian Railways Act. In the opinion of the lower appellate Court the Pamban Union has been re-christened and given a new name, namely, the Mandapam. Panchayat Board. The only change effected at that time was the removal of the revenue village of Pamban from the territorial limits of the Mandapam Panchayat Board. This indicates that the main point dealt with by the Courts below referred to the absence of a notification published under Section 135 of the Indian Railways Act in which the Mandapam Panchayat Board is specifically named.
6. The appellant's learned advocate urges another and what appears to me to be a better contention in support of his case that the appellant Railway Company cannot be held liable to pay house tax to the Mandapam Panchayat Board. It is that the tax claimed is different from the tax mentioned in Ex. I. He relies upon the case reported in Municipal Council, Cuddappah v. M. & S.M. Railway Co., Ltd. : AIR1929Mad746 , in support of his contention. The headnote is worded as follows:
A notification of the Government of India issued under Section 135 of the Indian Railways Act, empowering a local authority, functioning under the Madras District Municipalities Act (IV of 1884) to levy taxes in respect of houses land and water ' will not entitle that local authority, functioning under the Madras District Municipalities Act (V of 1920) which repealed the earlier enactment, to impose ' property tax ' under Section 81 of the later enactment, as the taxes in respect of which the notification was issued are substantially different from the ' property tax' mentioned in Act V of 1920.
7. In that case, 'house, land and water' tax which the Railway Company was declared to be liable to pay by the Government of India notification was subject to a maximum limit of 8 1/2 per cent, on the valuation of the buildings or land or both. There was no such limit to the property tax which was sought to be collected under the Madras District Municipalities Act of 1920. The latter also comprised many items which could not be ' house, land and water ' tax under the earlier Act, the two taxes were thus substantially different and for that reason it was held that the new tax could not be collected without a fresh notification under Section 135 of the Indian Railways Act. On behalf of the appellant it is contended in the present case that the house tax which the notification, Ex. I, declared that the. appellant company was liable to pay to the Pamban Union is not the same as the tax that is ' now claimed by the Mandapam Pancbayat Board and that therefore the notification, Ex. I, cannot be relied on by the respondent Board as sufficient compliance with Section 135 of the Indian Railways Act. This point is not specifically dealt with in the judgment of the Courts below. The appellant's learned advocate invites the attention of the Court to the written statement filed in the trial Court in paragraph 4 of which this contention was raised and states that it was pressed in the lower Courts also.
8. The following points of difference between the nature, incidence and the method of levy of house tax under the Madras Local Boards Act of 1920 and under the later Act of 1930 under which the present claim is made by the Mandapam Panchayat Board are stressed on behalf of the appellant According to Section 98 of the Act of 1920 prior to its amendment, if the president of the District Board notifies under Section 77 that a tax on houses shall be levied, such tax shall at the rate and from the date specified in the notification, be levied on all houses situated within any Union. But after the amendment it is not the president that has the power of determining the levy of the tax, but it is the District Board which may do it by a resolution, or in the alternative, the local Government. According to Section 100 of the Act of 1920 prior to the amendment the tax imposed under Section 98 shall be payable by the owner or occupier of the house in two equal instalments. But after the amendment the house tax shall be levied every half year and shall, save as otherwise provided, be paid by the owner of the house within thirty days after the commencement of the half year. Schedule IV of the Act of 1920 which also was substantially amended in 1930 contains important rules which have to be followed in levying this tax. According to Rule 18 of the schedule prior to the amendment, in the case of railway stations and all buildings belonging to the Government the estimated present cost of erectir|g the building less a reasonable amount on account of depreciation shall be deemed to be the capital value and six per centum on the said amount the annual value. After the amendment, in the case of any Government or railway building, the capital value of the building shall be deemed to be the total of the estimated value of the land and the estimated present cost of erecting the building after deducting for depreciation a reasonable amount which shall in no case be less than ten per centum of such cost and its annual value shall be deemed to be six per centum of such total. The material change effected by this amendment is that it provides for the inclusion of the value of the land on which the superstructure stands in making the assessment, while prior to the amendment, it was only the cost of the building that had to be taken into consideration. The provisions regarding depreciation were also altered. Rule 12 of Schedule IV prior to the amendment was to the effect that a Union Board may resolve to assess houses for the purpose of house tax either on their capital or their annual value, but shall not assess them on any principle other than that of valuation. After the amendment a Panchayat may resolve to assess houses either on their capital or annual value, and shall not assess them on any other principle. It will thus be seen that although there is no substantial change in the name of the tax, important changes were introduced by the amending Act of 1930 in the nature, incidence and the method of assessment.
9. Mr. Rajah Ayyar, the earned Counsel for the respondent, argues that Ex. I the notification published by the Government of India makes specific mention of the liability of the appellant Railway Company to pay ' house tax,' which he points out is the expression used in the Amending Act of 1930. This notification was published on the 8th May, 1930. The amending Act of 1930 which introduced changes in the Local Boards Act of 1920 was passed by the Madras Legislature and the assent of the Governor of Madras was given on the 2nd May, 1930, a few days prior to the publication of the notification Ex. I. Earned Counsel wanted to build an argument on this, by pointing out that the notification, Ex. I, was really issued after the Amending Act of 1930 was passed. But on better scrutiny he conceded that the assent of the Governor-General was given to the Amending Act only on the 17th June, 1930, and the new Act was published in the official Gazette only on the 26th August, 1930, on which date it became law. It is also significant that the notification contains a footnote which is worded as follows, which leaves no room for doubt as to the statute in respect of which it was passed,
Explanation.--In this schedule ' house tax ' means the house tax levied under Section 98 of the Madras Local Boards Act of 1920 (Madras Act XIV of 1920).
10. It is then argued that the notification, Ex. I, has declared the appellant company to be liable to pay ' house tax ' and that therefore the condition precedent prescribed by Section 135 of the Indian Railways Act of 1890 must be deemed to have been fulfilled in the present case, since the claim made on behalf of the respondent Board is for' house tax.' The argument is that the method of levying the tax may have been changed subsequent to the notification, Ex, I, issued under Section 135, but so long as the tax continues to be house tax which is mentioned in the notification the appellant Railway Company cannot rely upon absence of a fresh notification after the new Act came into force. This contention is unsound according to the view expressed in Municipal Council, Cuddappah. v. M. & S.M. Railway Co., Ltd. : AIR1929Mad746 As stated in the leading judgment in that case, taxing statutes have to be construed strictly. In the words of Rowlatt, J., in the case reported in Cape Brandy Syndicate v. Inland Revenue Commissioners (1921) 1 K.B. 64 : .in a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no necessity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.
11. In the case reported in Bank of Chettinad v. Commissioner of Income-tax, Madras the judgment of the Privy Council contains the following observations:
Their Lordships think it necessary once more to protest against the suggestion that in revenue cases ' the substance of the matter' may be regarded as distinguished from the strict legal position. In Inland Revenue Commissioner v. Duke of Westminster (1936) A.C. 1 disapproval of this doctrne was expressed in the opinions of Lord Tomlin and Lord Russell of Killowen. A passage from the opinion of Lord Russell may usefully be cited. It is as follows:
I confess that I view with disfavour the doctrine that in taxation cases the subject is to be taxed if, in accordance with a Court's view of what it considers the substance of the transaction, the Court thinks, that the case falls within the contemplation or spirit of the statute. The subject is not taxable by inference or by analogy, but only by the plain words of a statute applicable to the facts and circumstances of his case. As Lord Cairns said many years ago in Partington v. Attorney-General (1869) 4 H.L. 100 122. As I understand the principle of all fiscal legislation it is this : If the person sought to be taxed comes within the letter of the law he must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand, if the Crown, seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however, apparently within the spirit of the law the case might otherwise appear to be.
12. Applying these principles it seems to me that the provisions of Section 135 of the Indian Railways Act of 1890 have not been fulfilled in the present case, because there is no notification published as required by that section which constitutes a condition precedent to the liability of the appellant Railway Company to pay the tax claimed by the plaintiff-respondent. For this reason it must be held that the plaintiff is not entitled to a decree against the appellant Railway Company.
13. The decisions of the Courts below must therefore be reversed and this second appeal allowed with costs throughout.
14. Leave to appeal is granted.