Appeals Nos 600 and 679 of 1964
Appeals from the judgment and decree dated February 20 1962 of the Bombay High Court Nagpur Bench at Nagpur in Appeals Nos 196 and 195 of 1956 from original decree
SG Patwardhan section Murthy and B P Maheshwari for the appellant in CA No 60064
SN Kherdekar and A G Ratnaparkhi for the appellant in CA No 67964
AV Viswanatha Sastri and M section Gupta for the respondent in CA No 60064
AV Viswanatha Sastri and M section Gupta for U P Singh for the respondent in CA No 67964
502 The Judgment of Subba Rao Mudholkar and Ramaswami JJ was delivered by Mudholkar J The dissenting Opinion of Raghubar Dayal and Bachawat JJ was delivered by Dayal J Mudholkar J This judgment will also govern Civil Appeal No 679 of 1964 since common questions of law arise in both the appeals
For illustrating the points which arise for consideration in these appeals we will set out briefly the facts pertaining to CA 600 of 1964
The appellant hereinafter referred to as the Company is a private limited company having its registered office at Calcutta and a branch office at Dhamangaon which was formerly in the Province of Central Provinces  Berar but is now in the State of Maharashtra
The company owns a ginning factory at Dhamangaon
The Notified Area Committee of that place imposed under section 661b of the Central Provinces Municipalities Act 1922 hereinafter referred to as the Act as applied to Berar a tax at the rate of one anna per bojha of ginned cotton and one anna per bale of pressed cotton as from Dec 22 1936 on which date a notification sanctioning the imposition under section 2411 of the Act was published in the official Gazette by order of the Government of the Province
The Notification in question runs as follows No 7911 3242 M VII In exercise of the powers conferred by clause a of sub sec
1 of sec
241 of the Central Provinces Municipalities Act 1922 CP Act 11 of 1922 as applied to Berar the Local Government is pleased to confirm the following rule made by the Notified Area Committee Dhamangaon in the Amravati district under clause b of sub section
1 of sec
61 of the said Act for imposing a tax on persons carrying on the trade of ginning and pressing cotton by means of steam or mechanical process within its limits Rule The committee shall levy 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 following rates from the date of the publication of this notifiCation in the Central Provinces Gazette a For each bojha of 392 lbs
ginned 1 anna
b For each bale of 392 lbs
pressed 1 anna
By order of the Government Ministry of Local Self Government Sd R N Bannerjee Secretary to Government Central Provinces
503 The Notified Area Committee of Dhamangaon decided to raise the rate from 1 anna per bojha and 1 anna per bale to four annas per bojha and four annas per bale
Soon after this decision it caused the following notification to be published in the official Gazette on April 10 1941
The Notification runs thus The following amendment to the rule for imposition of the tax  by the o Municipal Committee Dhamangaon in the Amraoti district under cl
b of sub sec
1 of sec
66 of the Central Provinces Municipalities Act 1922 11 of 1922 as ap plied to Berar on persons carrying on the trade of ginning and pressing cotton by means of steam or mechanical process within its limits published in the Central Provinces and Berar Gazette Notification No 7911 3242 MVlll dated the 22nd Dec 1936 is published for the information of the public the same having been previously published as required by subsection 3 of sec
68 of that Act and in exercise of the powers conferred by sub sec
7 of sec
68 of that Act the municipal committee directs that the said amendments shall come into operation on the 1st August 1941 Amendment For the figure and the word anna  occurring in clauses a and b of the rule the figure and word 4 annas  shall be substituted
Sd B section Mundhada President Municipal Committee No 2418 M XIII Certain rules were framed by the Government for the assess ment and collection of tax which were also published on Dec 22 1936
These rules were however amended by the Local Government and the amended rules were published in the Gazette on July 30 1941
It is these latter rules which are now in force
Consequent upon the amendment of the rules the appellants in the two appeals and the proprietors of the ginning factory in Dhamangaon have been paying these taxes at the new rate of 4 annas per bojha and 4 annas per bale
It may be mentioned that in Dec 1951 the Municipal Com mittee
Dhamangaon which by then had replaced the Notified Area Committee proposed to raise the tax from four annas to one rupee per bojha and per bale but eventually dropped the proposal
Apparently being alarmed at the abortive attempt of the Municipal committee to raise the tax further the appellant and other factory owners in Dhamangaon instituted suits for recovery from the Municipal Committee of excess tax paid by them within 3 years of the dates of the respective suits
The Company claimed refund of Rs 12511 6 6 on the ground that it was recovered from it illegally 504 by the Municipal Committee and paid by it under a mistake
The amount has been computed by them thus Rs 6905 14 6 recovered from them in respect of ginned cotton between 29 3 49 and some date in the year 1952 plus Rs 8048 8 0 in respect of pressed cotton recovered from them during the same period less Rs 3738 9 6 which was legally due from them thus totaling to Rs 11215 13 0
To this they added Rs 1295 9 6 as interest by way of damages on the aforesaid said amount at the rate of 9 per cent
In the plaint it was contended by the Company that after the coming into force of section 142A of the Government of India Act 1935 which came into effect from 1 4 1939 till January 25 1950 a tax on trade profession or calling in excess of Rs 501 per annum could not be imposed either by a Provincial Government or by a Local Body
Nor again could an existing tax on trade profession or calling be raised further so as to exceed Rs 501 per annum
The Company further pointed out that after the coming into force of the Constitution the upper limit of the tax was raised to Rs 250per annum and that as the Company was already paying more than this amount per year even at the rate of one anna per bojha and one anna per bale recovery from them at the enhanced rate of 4 annas was illegal with effect from April 1 1939
The Municipal Committee contended in its written statement that the provi sion of section 142A of the Government of India Act and article 276 of the Constitution which limit the tax on professions trades or callings or employments to Rs 50 and Rs 250 per annum respectively do not apply to a case such as the present where there is no imposition of a new tax but only an enhancement of the rate of an existing tax
It further contended that the tax in question at the rate of 4 annas per bojha and 4 annas per bale was in existence when article 276 came into force and is saved by that Article
According to the Committee the Company is not entitled to claim back the amount paid by it under section 72 of the Indian Contract Act or the general law
This contention however was negatived by the trial court and does not appear to have been reiterated before the High Court
Nor again was it pressed before us by Mr Viswanatha Sastri who appears for the Municipal Committee
The principal contention which was pressed before the trial court and raised before the High Court was that the Company s suit was bad for non compliance with the requirements of section 48 of the Act and that is the point which we have to consider in this appeal
48 of the Act reads thus 1 No suit shall be instituted against any Committee or any member officer or servant thereof or any person acting under the direction of any such committee member officer or servant for anything done or purporting to be done under this Act until the expiration of two months next after notice in writing stating the cause of action the name and place of abode of the intending plaintiff and the relief which he claims 505 has been in the case of a committee delivered or left at its office and in the case of any such member officer or servant or person as aforesaid delivered to him or left at his office or usual place of abode and the plaint shall contain a statement that such notice has been so delivered or left
2Every such suit shall be dismissed unless it is instituted within six months from the date of the accrual of the alleged cause of action Mr Patwardhan for the appellant contends that this was a case of recovery of an Illegal tax and therefore a claim for its refund fell outside the provisions of section 48 of the Act
In support of his contention he relied upon a number of decisions and we will proceed to examine them
The first of these cases is Municipal Committee Karania vs New East India Press Co Ltd Bombay1
That was also a case where enhancement of a tax was made by the Municipal Committee of Karanja after March 31 1939 in excess of Rs 50 per year payable by one person
There a Division Bench of the High Court held that the enhancement was in contravention of section 142A of the Government of India Act 1935 and was illegal that a  suit for refund of the tax is maintainable by the person who has paid the tax and that such a suit is not barred by the provisions of sections 48 83 or 84 of the Act
The relevant observations of Bose ACJ as he then was who delivered the judgment are as follows It was then argued that the Civil Courts have no jurisdiction because of sections 83 and 84 of the Central Provinces Municipalities Act as applied to Berar
It was said that Act provides for remedies in cases of wrongful recovery of taxes
Therefore the jurisdiction of the civil courts is barred
A large number of cases have dealt with this question but we need consider only two of the latest decisions
In District Council Bhandara vs Kishorilal Civil Revision No 220 of 1946 decided on the 25th June 1948 one of us Bose J held that provisions corresponding to sections 83 and 84 come into play only when the Municipal Committee acts within the scope of its authority that is to say when it is acting or purporting to act under the Municipalities Act
It is pointed out there in respect of this very section of the Government of India Act sec
142 A that when a Municipality is prohibited by law from imposing a tax in excess of a certain amount then it cannot be said to be acting either under the Act or purporting to act under the Act if it exceeds that amount and in such a case the jurisdiction of the Civil Courts is not barred
Here again we may refer to the fact that in the Privy Council case Radha Kishan Jaikishan Firm vs Municipal Committee Khandwa2 this objection does not appear to have 1 ILR 2 1939 30 Nag
TR 121 PC 506 been taken
It is hardly likely that it would have been omitted had there been any force in the contention
In the present case as in District Council Bhandara vs Kishorilal the Municipality is seeking to recover sums which the law has prohibited it from taking in the shape of taxes
Accordingly as it is acting wholly without jurisdiction the claims lie and are not barred by reason of sections 83 and 84
Then it was stated that the claims are barred by sec
48 of the Municipalities Act
There again the same considerations apply
48 comes into play only when the act is done or is purported to be done under the Municipalities Act
As we have said that is not the case here because its action is something which is prohibited by law and so wholly beyond its jurisdiction and therefore section 48 does not apply
The distinction between a case where section 48 applies and a case where it does not is clearly shown in The Amraoti Town Municipal Committee vs Shaikh Bhikan1
Kishorilal s case to which reference is made in the above quotation is a decision of a Division Bench upon a reference made by Bose J and which though rendered earlier has been reported in IL R
In that case a tax imposed by the District Council Bhandara under a similar provision of the Local Self Government Act 1920 at the rate of three pies per khandi on persons carrying on trade of husking milling or grinding of grains was raised by it to one anna as from April 1 1942 with the sanction of the Provincial Government
It was contended on behalf of the respondent that the recovery was illegal
Since the matter involved the interpretation of section 142A of the Government of India Act 1935 Bose J acting under one of the rules of the High Court referred it to a Division Bench
This is what the Division Bench held  We are clear that the tax in question is a tax which can be so termed
This was in fact conceded in the Court below and the contention raised before us that the persons who gave grain to Kishorilal for grinding and not he were the traders concerned was plainly devoid of force
He had a mill and with it carried on the trade of milling grain
The tax in question was recovered from him because of this and it was one of the taxes hit by section 142 A of the Government of India Act 1935 and the Professions Tax Limitation Act 1941 XX of 1941
 When the matter went back before Bose J it was contended on behalf of the District Council that the suit was barred altogether by the provisions of section 71 and that the provisions of section 73 make the issue of a notice by the Distt
Council a precondition for the institution of a suit of the kind before him
Reliance was placed on a 1ILR  219 220
507 certain rule framed under section 791 xxix of the Central Provinces local Self Government Act 1920 After quoting section 71 and the rule relied on the learned Judge observed It will be observed that both section 79 and the rule Fire confined to orders and decisions given under the Act
It is impossible to say that an order which contravenes the law or is made in the face of an express statutory prohibition can be said to be under the Act
The words purporting to be given or made under the Act are not present in this section and so the difficulty which arises regarding the other point is not present here
I hold that the suit is not incompetent on this score Pointing out that the other question urged before him was more difficult the learned Judge said that his conclusion was that what was done in the case was not under the Act and therefore what remained for consideration was whether it was purported to be done Under the Act
He came to the conclusion that what was done was not purported to be done under the Act and expressed himself thus Now this expression has recently been interpreted by their Lordships of the Privy Council in HHB Gill vs The King2 also in Hori Ram Singh vs The Crown2 of which their Lordships approved
The question is a difficult one and as Varadachariar J observed in the Federal Court decision at p 187 it is neither possible nor desirable to lay down any hard and fast rule
The question is substantially one of fact and must be determined with reference to the act complained of and the attendant circumstances
 I think however that the following test which their Lordships of the Privy Council laid down concludes the matter so far as this Act is concerned
Their Lord ships say A public servant can only be said to act or to purport to act in the discharge of his official duty if his act is such as to lie within the scope of his official duty
 Now I can understand it being said that an act which is within the scope of an official duty cannot be taken out of that category simply because it is carelessly or negligently performed but I cannot see how an act which is expressly prohibited by law can be said to lie there
If a magistrate directed to supervise a sentence of whipping duly imposed by a competent Court has the wrong man whipped by mistake or imposes more lashes than war ranted I can understand him being protected
He is there acting within the scope of his duty
But if instead of having the man whipped
he has him branded with a hot iron he would not in my opinion be able to claim the protection
In the same way I cannot see bow a Municipal Committee can 1AIR 21939 FCR 159
508 be said to be acting under the Act  when it does that which is expressly prohibited by the Legislature
Say it purported to tax salt
Its action would not be covered by sec
73 because the Constitution Act makes that an exclusively Central subject
Say also a municipality attempted to tax marriages or births that would be completely beyond its province and it could not be heard to say that because it has been given certain limited powers of taxation therefore it purports to act  under the Act whatever the nature of the tax it attempts to impose
In the same way if the Legislature limits the authority of the Committee to a maximum of Rs 50 1 do not think it can be said to purport to act within the scope of the Act if it travels beyond its limited provisions A reference may be made to the decision in The Amraoti Town Municipal Committee vs Shaikh Bhikan1 which apparently takes a contrary view
There Niyogi J sitting singly has held that a suit against a municipal committee for the recovery of a tax illegally collected is governed by section 48 of the Central Provinces Municipalities Act and is therefore barred by limitation if not filed within six months of the
date of the collection of the tax
That case is however distinguishable in that there was no prohibition to the levy of the tax and all that had happened was that proper procedure had not been followed in imposing the tax
This was thus a case of something purporting to be done under the Act but not done strictly in accordance with the provisions
That such a case would squarely fall within the ambit of section 48 cannot be questioned
But the point is whether what was done by a local body under the colour of an Act can be regarded as something purported to be done under the Act even though neither the local body nor even the State Legislature has the power to do what was in fact done
The next case referred to was Gajadhar Hiratal vs Municipal Committee Washim2
That was also a case in which a tax on bojhas and bales of ginned cotton was raised from Re 0 2 3 per bale to Re 0 4 0 per bale and the learned Judges held following the decision in the New East India Press Co s case1 that the enhancement was ultra vires of article 276 of the Constitution
The other question did not arise for consideration in this case
This decision is therefore of little assistance to us because it is not contended before us that the enhancement of the tax is valid
There is however another decision in the same volume at p 483 The Municipality of Chopda vs Motilal Manekchand which is relevant for consideration in this appeal
In that case a Division Bench while pointing out that the particular tax which was levied by the Municipality was in substance a tax on trade within the meaning of article 276 of the Constitution and being in 1 ILR 3 TLR 1948 971
2 ILR 509 excess of Rs 250 pa was beyond the competence of the Municipality held that a suit for its refund beyond the time prescribed by rules was barred by limitation
According to the learned Judges the levy of the tax though beyond the authority of a Municipality was  an act done in pursuance or execution or intended execution of the Bombay District Municipal Act and was merely a wrongful act as distinguished from an ultra vires or illegal act
In coming to this conclusion they followed a previous decision of the High Court in Jalgaon Borough Municipality vs The Khandesh Spinning and Weaving Mills Co Ltd1
Incidentally we may mention that an appeal was brought before this Court from that part of the decision in The Municipality of Chonda East Khandesh vs Motilal Manekchand Press Factory Chonda2 which held that the levy was unconstitutional
Ayyangar J who spoke for the Court has stated towards the end of the Judgment as follows In the circumstances the correctness of the decision of the High Court in holding the impugned levy to be a tax on  callings or employments  and therefore subject to a pecuniary limit of Rs 250 per year does not really arise for consideration
The respondent  had in their plaint no doubt challenged the entirety of the levy and sought relief on that basis but they had however pleaded in the alternative that the tax might be held to be one on a trade etc  and therefore within article 2762 and claimed relief on this footing in the alternative
The learned Civil Judge had accepted this alternative contention and had granted them a decree on that basis and the respondents had not challenged the correctness of that decision by preferring an appeal and the learned Judges of the High Court had accepted this view of the nature of the levy
We however consider it proper to add that there is considerable force in the opinion expressed by the High Court that the tax in question at the date when the same was challenged being a levy imposed on persons carrying on the business of pressing cotton was a tax on professions trades callings or employments  and that the learned Judges of the High Court came to a correct conclusion that the respondents were entitled to the declaration which was granted as regards the maximum amount of the tax that could be levied from the respondents In Jalgaon Borough Municipality s case3 on which the High Court relied in Motilal Manekchand s case what had happened was this The Municipality acting under section 73iv of the Bombay Municipal Boroughs Act 1925 levied octroi duty on fuel oil or furnace oil under certain rules and by laws framed by it with the sanction of the Government which provided for the levy of an octroi duty on various articles including oils used for machinery 
1 2 CA No 168 of 1961 decided on March 11 1962 3 55 Rom
LR 65
N 4SCI 5 510 it was found that the Municipality was not entitled to levy any octroi duty on fuel oil or furnace oil which was not comprised within the items enumerated in the octroi rules and by laws
The respondent who had paid the tax instituted a suit for its recovery
One of the questions which arose for consideration was whether the provisions of section 206 of the Bombay Municipal Boroughs Act 1925 corresponding to those of section 48 of the Central Provinces and Berar Municipalities Act 1922 applied to the case
The learned Judges of the High Court held that what the municipality lid was not an act done in pursuance of the Act but it was an act which it purported to do in pursuance of the Act and that therefore its action was well within the terms of section 206
In the course of the judgment Bhagwati J observed that the acts which fell within the category of those done or purporting to have been done in pursuance of this Act could only be those which were done under a vestige or semblance of authority or of a shadow of right
If an act was outrageous and extraordinary or could not be supported at all not having been done with a vestige or semblance of authority or a shadow of right invested in the party doing that act it would not be an act which is done or purported to have been done in pursuance of the Act
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 have been done in pursuance of the Act if they are done with a vestige or semblance of authority or a sort of a right invested in the party doing those acts
The learned Judge then referred to certain decisions and said that under section 73iv of the Act power was given to the Municipality to impose octroi duty on articles and goods imported within its jurisdiction
What had happened there was that the defendants on the interpretation which they gave to the words oils used for machinery did something which ultimately on an adjudication in that behalf the court found to be wrong
By acting in that way what the Municipality purported to do could not be said to be illegal or outrageous and extraordinary or done without having any vestige or semblance of authority or without even a shadow of a right
Apart from the fact that much of what was said in this case is opposed to a recent decision of this Court to which we will presently make a reference certain observations made by Bhagwati J in fact lend support to the argument advanced before us by Mr Patwardhan
The observations we have in mind are to the effect that where a municipality not having the power to levy a particular tax at all either wholly or in regard to some classes of goods had purported to levy the same it would certainly be an act which was outrageous and extraordinary or done without having any vestige or semblance of authority or without even a shadow of a right
Here the over stopping of its authority by the Municipality consists not in the matter of the selection of a class of goods but of that of the rate at 511 which it has levied and collected a tax
It has levied and collected a tax beyond constitutional limits
Therefore to the extent it has done so the tax could properly be said to have been levied without a vestige or semblance of authority or even of a shadow of right
We may now refer to the recent decision of this Court in The Poona City Municipal Corporation vs Dattatraya Naresh Deo dhar1
That was a case in which the Municipal Corporation had imposed a tax on the refund of octroi duty collected by it on goods imported within the Municipal limits of the city
Its practice was to deduct the tax from the amount which it was required to refund and pay the person entitled to the refund only the balance
A suit was instituted by the respondents for refund of the amount illegally deducted by the Corporation from the octroi refund made by the Corporation to the respondents
It was contended on behalf of the Corporation that the deduction made by it was valid and that the suit was barred by limitation
This Court upheld the contention of the respondents that the Corporation had no power to impose the tax and that in fact there was a prohibition against the imposition of such a tax by the Corporation
On the plea of limitation which was founded upon the provisions of section 487 of the Bombay Act which are almost the same as those of section 48 of the Act with which we are concerned this Court observed The benefit of this section would be available to the Corporation only if it was held that this deduction of ten per cent was an act done or purported to be done in pursuance or execution or intended execution of this Act  We have already held that this levy was not in pursuance or execution of the Act
It is equally clear that in view of the provisions of section 127 4 to which we have already referred the levy could not be said to be purported to be done in pursuance or execution or intended execution of the Act  For what is plainly prohibited by the Act cannot be claimed to be purported to be done in pursuance or intended execution of the Act
 Sub sec
4 of section 127 of the Act to which this Court has referred is in the following terms Nothing in the section shall authorise the imposition of any tax which the State Legislature has no power to impose in the State under the Constitution
 It is pertinent to bear in mind that the conclusion of this Court on the question whether the act was done or purported to be done under the Act was not based solely on this provision and reliance wag placed upon it as affording additional support to the conclusion already arrived at
It seems to us that this provision was enacted by way of abundant caution
For the Constitution is the 11964 8 SCR 178
512 fundamental law of the land and it is wholly unnecessary to provide in any law made by the Legislature that anything done in disregard of the Constitution is prohibited
Such a prohibition has to be read in every enactment
This decision does appear to conclude the matter
During the pendency of the suit before the trial court the appellant had preferred a writ petition before the High Court at Nagpur in which it contended that the notification of April 10 1941 enhancing the tax from one anna per bojha and one anna per bale to four annas per bojha and four annas per bale was illegal and ultra vires and should therefore be quashed
This petition was granted by the High Court on April 12 1955
There was therefore a direct decision before the trial court and the appellate court which though it could not be treated as res judicata was binding on those courts and was treated as such by them and it is perhaps because of this that it was not sought to be urged on behalf of the Municipal Committee when the second appeal was argued before the High Court that the notification is valid and therefore the Municipal Committee could recover the tax at the enhanced rate
Though Mr Viswanatha Sastri did say that the decision of the High Court is not res judicata he did not directly challenge its correctness
What he argued was as follows The levy of a tax on professions trades callings etc
was within the power of the Provincial Legislature and is now within the power of the State Legislature
It could in the past and can even now levy such a tax at the rate of 4 annas per no ha and 4 annas per bale that both under section 142 A of the Government of India Act and article 276 of the Constitution the Municipal Committee could collect such a tax to the constitutional limit which was formerly Rs 50 pa and is after the coming into force of the Constitution Rs 250 pa
The mischief according to him is not in the levy but in the realisation of an excess over the limit
To put it differently the ban is not upon the rate of tax but upon excess collection thereof
Therefore the collection of a tax above the constitutional limit was not without jurisdiction but only illegal or irregular
A suit by an assessee to recover the amount paid by him in excess of the constitutional limit would therefore be in respect of a matter purported to be done under the Act and the provisions of section 48 of the Act would apply to it
Further according to him every suit against a Committee for anything done or purported to be done under the Act must comply with the conditions laid down in the section
He points out that the assessment of the tax was made by an authority competent to make an assessment that in making it the authority proceeded in accordance with the provisions of the Act and assessed the tax as authorised by Rules which had been sanctioned by the former Government of Central Provinces and Berar
So even it is assumed that any of 513 the Rules were ultra vires and therefore the assessment and recovery of the tax was illegal what the authority had done was something purported to be done under the Act
Some of these arguments were advanced in cases discussed earlier and rejected
In support of his contention he placed reliance on the decisions in Richard Spooner and Bomanjee Nowrojee vs Juddow1 and Dhondu Dagdu Patil vs The Secretary of State for India2
These cases were not pressed in aid in the decisions so far considered and we would deal with them now
Before we deal with these cases it is necessary to point out the rationale upon which section 142 A of the Government of India Act 1935 was enacted and on which article 276 of the Constitution now rests
It is that the legislative spheres of the Provinces and the Centre came to be clearly demarcated in regard to items falling within Lists 1 and 11 of Schedule VII of the Government of India Act and now to those falling within the same lists of Schedule VII of the Constitution
Taxes on professions trades callings and employments are taxes on income and are thus outside the provincialand now State list and belong exclusively to Parliament and before that to the Central Legislature
Yet under a large number of laws enacted before the Government of India Act 1935 came into force power was conferred on local governments and local authorities to impose taxes on such activities
This was obviously in conflict with section 100 of the Government of India Act
When this was realised section 142 A was enacted by the British Parliament which saved the power conferred by pre existing laws but limited the amount payable to Rs 50 after 31st March 1939
A saving was made however of pre existing laws subject to certain conditions with which we are not concerned
The provisions of this section have been substantially reproduced in article 276 of the Constitution with the modification that the upper limit of such tax payable per annum would be Rs 250 instead of Rs 50
A tax can be recovered only if it is payable  and it would be payable only after it is assessed
it is therefore futile to contend that the ban placed by the aforesaid provisions extends only to recoveries and not to an earlier stage
Now coming to the cases the first was one in which the question considered by the Privy Council was whether the Supreme Court at Bombay was competent to entertain a suit for recovery of damages brought by one Harkissondas Hurgovindass against the Collector of Bombay and others in respect of trespass and nuisance committed by certain officers of the Collectorate while purporting to execute a distress warrant issued against one Narrondass for non payment of arrears of land revenue
Under the Letters Patent dated Dec 8 1823 the jurisdiction of the Supreme Court was barred in any matter concerning the revenue under the management of the 1 4 MIA 353 379
2 ILR  106
514 said Governor and Council of Bombay respectively or concerning any act done according to the usage and practice of the country or the regulations of the Governor and Council of Bombay aforesaid
 Similar provisions were contained in section 8 of Statute 21 Geo
111 c 70
The Supreme Court over ruled the defendant s contention on the ground that what was due from the plaintiff was not revenue but a perpetual ground rent which was incapable of being enhanced and could not be regarded as revenue at all
After holding so Lord Campbell who delivered the opinion of the Judicial Committee observed The point therefore is whether the exception of jurisdiction only arises where the Defendants have acted strictly according to the usage and practice of the contrary and the Regulations of the Governor and Council
But upon this supposition the proviso is wholly nugatory for if the Supreme Court is to inquire whether the Defendants in this matter concerning the public revenue were right in the demand made and to decide in their favour only if they acted in entire con formity to the Regulations of the Governor and Council of Bombay they would equally be entitled to succeed if the Statutes and the Charters contained no exception or proviso for their protection
Our books actually swarm with decisions putting a contrary construction upon such enactments and there can be no rule more firmly established than that if parties bona fide and not absurdly believe that they are acting in pursuance of Statutes and according to law they are entitled to the special protection which the Legislature intended for them although they have done an illegal act
In this case it may well be that the warrant against the goods of Tookaydass did not authorise the taking of the goods of Hurgovindass or even that Hurgovindass might not be liable for the arrears of quit rent  which accrued before he became owner of the house
Still the Collector was evidently of opinion that a distress might be made for the whole of the arrears due and that it was sufficient to introduce into the warrant the name of Tookaydass in whose name the house continued to be registered
The other Defendant never could have doubted the sufficiency of the warrant
If Indian revenue officers have fallen into a mistake or without bad faith have been guilty of an excess in executing the duties of their office the object of the Legislature has been that they should not be liable to be sued in a civil action before the Supreme Courts
 Later in his opinion Lord Campbell said If it concerned the revenue or was a matter concerning an act bona fide believed to be done according to the Regulations of the Governor and Council of Bombay his ie of the Judge of the Supreme Court jurisdiction was gone although prima 515 facie it appeared to be a trespass over which his jurisdiction might be properly exercised This case would have assisted Mr Sastri only if what was done was something which could legally have been done by the Municipality but was wrongly done by it as for instance the collection of a lawful tax from a person other than the one from whom it was due
But this decision is no authority for the proposition that if the Collector recovered or tried to recover from a person a sum of money as arrears of land revenue even though it did not fall within the definition of revenue or tried to collect a sum of money which he was expressly prohibited by law from collecting he would still be said to have purported to act under the revenue law which empowered him to collect land revenue
If an act of trespass was committed in execution of a distress warrant for recovery of such monies
a suit for damages would not have been barred
in the next case what the High Court was dealing with was the claim of the plaintiff against the Government for damages occasioned by the wrongful cancellation of his licence to sell liquor
The suit had been dismissed by the trial judge as barred by the provisions of section 67 of the Bombay Abkari Act 1878 firstly because the Collector had acted bona fide in pursuance of the Act and secondly because it was not instituted within four months from the date of the act complained of
The High Court upheld the dismissal of the suit and in the course of its judgment observed It is quite true that the Collector s action is not strictly in conformity with the section which authorises the revocation only on the actual conviction of the licensee
But the circumstances under which the Collector acted are so near the circumstances legally entitling him to act as he did that we feel bound to say the act was done in pursuance of the Statute
The law upon this point may be found stated in many cases of which we may notice Hermann vs Saneschal1
In strictness anything not authorized by a Statute cannot be said to be in pursuance of it while if it is authorized by the Statute clearly it would need no other protection
But if effect were given to such a construction it would altogether do away with the protection intended to be given accordingly the general principle is that if any public or private body charged with the execution of a Statute honestly intends to put the law in motion and really and not unreasonably believes in the existence of facts
which if existent would justify his acting and acts accordingly
his conduct will be in pursuance of the Statute and will be protected The learned Judges then referred to Spooner s case2 also
Mr Sastri laid particular emphasis on the concluding portion 1  2 4 MIA 353 379
516 of the observations quoted above
This again it may be said is not a decision which is quite in point
There was no want of jurisdiction in the Collector to do what he did but there was only the absence of facts which had they existed would have given him power to do what he did
Cases of this type must be distinguished from those like the present in which we must imply a constitutional or statutory prohibition against the act done
Where such prohibition exists or can be implied anything done or purported to be done by an authority must be regarded as wholly without jurisdiction and is not entitled to a protection of the law under colour of which that act was done
It is true as urged by Mr Sastri that it was within the competence of the respondent committee to raise the rate of tax from one anna to four annas per bojha and bale even after the coming into force of section 142 A of the Government of India Act 1935
The levy of tax at that rate cannot therefore be regarded to be beyond the jurisdiction of the respondent so long as the constitutional limit was not exceeded
What is however contended on behalf of the appellant is that the action of the Committee in compelling it to pay the tax in excess of the amount which was constitutionally recoverable from it in respect of any one year was ultra vires that thereby the provisions of section 142 A have been transgressed and therefore this was a case of utilization by the Committee of the provisions of the Act and the rules made thereunder for doing something which was prohibited by the Government of India Act 1935 and is now by the Constitution
It is true that the Committee had jurisdiction to recover an amount up to the constitutional limit
But it cannot fairly be contended on its behalf that merely because of this that the recovery by it of an amount in excess of the constitutional limit was only irregular or at the worst illegal
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
But where as here the validity of a provision of a statute can be upheld upon a possible construction of that provision it would be the duty of the court to so construe it as to avoid rendering the provision unconstitutional and reject a construction which will invalidate the provision
The final contention urged by Mr Sastri is based upon the decision of the Privy Council in Raleigh Investment Company Ltd vs Governor General in Council1
His argument is that the Municipalities Act contains adequate provisions dealing with refund of taxes and that the provisions of section 852 bar a suit for recovery of a 174 IA 50
517 tax wrongfully recovered by the Municipal Committee
It may be mentioned that the contention was not raised in the suit or in the grounds of appeal before the High Court and has not therefore been considered by it
It has been raised for the first time in the statement of case
But the scope of an appeal cannot even at the instance of the respondent who is entitled to support a decree in his favour even upon a ground found against him by the High Court
be permitted to be enlarged beyond that of the appeal before the High Court or the courts below
But as it is a question of consider able importance and might be raised in other similar suits which are said to be pending we propose to deal with it
Before dealing with Raleigh Investment Co s case1 we may refer to the provisions of the Act which Mr Sastri placed before us
831 provides for an appeal against the assessment or levy of or refusal to refund any tax under the Act before the Deputy Commissioner and sub section
1 A for a revision before the State Government
Sub sec
2 provides that if the authority hearing the appeal or revision entertains a reasonable doubt on any question as to the liability to or the principles of assessment of a tax it shall draw up a statement of the facts of the case and the point on which the doubt is entertained and refer the statement with his own opinion on the point for the decision of the High Court
There is however no express provision like that of section 311 or section 334 of the Indian Income tax Act entitling the assessee to a hearing either in the appeal or revision petition
Section 85 empowers the State Govern ment to make rules for regulating the refund of taxes and such rules may impose limitations on such refunds
Sub section 2 thereof provides that 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
This sub section can be availed only if the Act or the rules provide for making a claim for refund
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 unconstitutionality 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
These provisions cannot possibly apply to 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 174 IA 50
518 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 where under 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
It would be pertinent to advert also to the provisions of section 84 sub section
3 of which deals with Bar of other proceedings
Sub section
1 provides for the period of limitation for an appeal under section 831
Sub sec
2 empowers the appellate authority to require the assessee to deposit the tax before the hearing or the decision of the appeal
Sub sec
3 is in the following terms 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
 It will be seen that there is no express mention of a civil court in this sub section as there was in section 67 of the Indian Income tax Act 1922
In fact section 48 of the Municipalities Act contemplates the institution of a suit subject to fulfillment of certain conditions and thus indicates that it was not the intention of the legislature to make the machinery provided by the Act exclusive
But even if a bar to the Jurisdiction of a civil court be assumed or implied there is an absence of a reference to refund in sub section
3 of section 83 In other words no finality seems to have been given to a decision rendered by an authority under section 83 refusing to refund a tax improperly or File ally assessed or recovered
In the light of these circumstances we have to consider the applicability of the decision in Raleigh Investment Co s case1
In that case the Privy Council considered the effect of certain provisions of the Indian Income tax Act 1922 which prescribed remedies to an assessee who sought to challenge the assessment made against him and also the provisions of section 67
The relevant portion of section 67 was that no suit shall be brought in any civil court to set aside or modify any assessment made under this Act 
After examining all these provisions the Privy Council said that an effective and appropriate machinery was provided by the Act itself for the review of any assessment on grounds of law including the question whether a provision of the Act was ultra vires and it was in that setting that section 67 had to be construed
Then it went on to say that the phrase assessment made under this Act in section 67 meant an assessment finding its origin in an activity of the assessing officer acting as such and that the circumstance that 174 IA 50 519 he had taken into account an ultra vires provision of the Act was in that view immaterial in determining whether the assessment was  made under this Act
 But with respect 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 make 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 provisions 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
Such a construction might necessitate the consideration of the very constitutionality of the provision which contains this expression
This aspect of the matter does not appear to have been considered in Raleigh Investment Co s case1
This decision has been briefly referred to by this Court in Firm and Iliuri Subbayya Chetty  Sons vs The State of Andhra Pradesh2 and what this Court has observed is this In determining the effect of section 67 the Privy Council considered the scheme of the Act by particular reference to the machinery provided by the Act which enables an assessee affectively to raise in courts the question whether a particular provision of the Income tax Act bearing on the assessment made is or is not ultra vires
The presence of such machinery observed the judgment though by no means conclusive marches with a construction of the section which denies an alternative jurisdiction to enquire into the same subject matter
It is true that the judgment shows that the Privy Council took the view that even the constitutional validity of the taxing pro vision can be challenged by adopting the procedure prescribed by the Income tax Act and this assumption presumably proceeded on the basis that if an assessee wants to challenge the vires of the taxing provision on which an assessment is purported to be made against him it would be open to him to raise that point before the taxing authority and take it for a decision before the Court under section 661 of the Act
It is not necessary for us to consider whether this assumption is well founded or not
But the presence of the alternative machinery by way of 1 74 IA 50
2  at 764 520 appeals which a particular statute provides to a party aggrieved by the assessment order on the merits is a relevant consideration and that consideration is satisfied by the Act with which we are concerned in the present appeal
 We have already adverted to the provisions of sections 83 and 85 of the Act which are the only provisions brought to our notice as providing a machinery under the Act for challenging an assessment and we have pointed out that they do not cover a case like the present
Again the provision for an appeal before a Deputy Commissioner who is an authority who performs numerous functions under different laws functions which are executive as well as administra tive and judicial cannot be regarded as on par with one which provides for an appeal before an Appellate Assistant Commissioner under the Income tax Act an authority whose duties are confined to matters arising under that Act
Further the latter Act contains a safeguard in the shape of an appeal to the Income tax Appellate Tribunal which deals exclusively with matters arising under that Act and is an independent tribunal
In the circumstances it must be held that even in the class of cases to which the provisions of sections 83 and 85 of the Municipalities Act apply they 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
It is true that Sub sec
2 of section 83 provides for a reference to the High Court but even that provision cannot be said to be a sufficiently efficacious remedy for challenging the assessment made on an assessee
For whether to make a reference or not is at the discretion of the appellate or revisional authority and the Act does not confer upon the person aggrieved a right to move the High Court as does the Income tax Act to require a reference to be made in an appropriate case
We may again point out that there is a complete absence of a provision corresponding to section 67 of the Indian Income Tax Act barring the institution of a suit in so far as refusal of refund of a tax is concerned
In Secretary of State vs Mask  Co1 the Privy Council has observed that it is settled law that the exclusion of the jurisdiction of the civil courts is not to be readily inferred but that such exclusion must either be explicitly expressed or clearly implied
As earlier pointed out this decision has been approved by this Court in the case of Firm and Illuri Subbayya Chetty  Sons2
Further one of the corollaries flowing from the principle that the Constitution is the fundamental law of the land is that the normal remedy of a suit will be available for obtaining redress against the violation of a constitutional provision
The Court must therefore lean in favour of construing a law in such a way as not to take away this right and render illusory the protection afforded by the Constitution
So whatever be the position with respect to section 67 of the Indian 1 1940 67 TA 222226
2  at 764
521 Income tax Act so far as section 833 of the Act is concerned we find it reasonably possible to construe it as not depriving a person of his right to obtain redress from a civil court in respect of an amount recovered from him as a tax in violation of article 276 of the Constitution
We have already pointed out that no machinery is provided by the Act for obtaining a refund of tax assessed and recovered in excess of the Constitutional limit and that the machinery actually provided by the Act is not adequate for enabling an assessee to challenge effectively the constitutionality or legality of assessment or levy of a tax by a municipality or to recover from it what was realised under an invalid law
It is therefore not possible to infer that the jurisdiction of the civil court is barred
The decision in the Raleigh Investment Co s case1 does not therefore help the respondent
Moreover we must bear in mind the provisions of article 265 of the Constitution which preclude the levy or collection of a tax except by authority of law which means only a valid law
There was no corresponding provision in the various Acts for the governance of India which preceded the Constitution
Under article 226 the Constitution has provided a remedy to a citizen to obtain redress in respect of a tax levied or collected under an invalid law
This remedy will not be affected by any provision like section 67 of the Indian Income tax Act or like section 843 of the Municipalities Act
We must not lose sight of the fact that what the appellant has claimed in the suit is 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
The appellant has not sought to modify or set aside any order made by an authority acting or purporting to act under the Act
No doubt the relief of repayment is claimed on the ground that the enhancement of the rate is unconstitutional
No doubt also that the appel lant had sought a further relief of injunction
As regards the first the position is that the High Court of Nagpur has held in the petition under article 226 preferred by the appellant the enhancement to be unlawful
This decision was rendered by the Court during the pendency of the suit and was binding on the civil court in which the suit was pending and has been in fact followed by it
As regards the relief of injunction that relief became unnecessary because of the order made by the High Court in the Writ petition
It is apparently for this reason that the civil court did not award that relief to the appellant
In view of the High Court s decision it was not at all necessary for the trial court to consider in the suit before it the question of the validity of the assessment by or collection of the tax but only to ascertain the amount which was payable to the appel lant and whether the suit was barred under section 48 or section 852 as contended by the respondent
In these circumstances we are of opinion that the appellant s suit cannot be said to be barred even if we interpret section 843 of the Municipalities Act in the same way as the Privy Council interpreted section 67 of the Indian Income tax Act
274 1A 50
522 We may further observe that where there is an express prohibition in a statute against a local authority from imposing a tax as for instance the recovery in the Statute construed by this Court in the Poona City Municipal Corporation case1 or where prohibition can be implied whether it be with regard to an item of taxation or with regard to the rate of tax or the quantum of tax payable by an individual assessee the action of a local authority or of any of its instrumentalities in transgressing that prohibition must be regarded as being in excess of its jurisdiction
Here there is a prohibition in section 142 A of the Government of India Act and now in article 276 of the Constitution which preclude a State Legislature from making a law enabling a local authority to impose a tax on profes sions trades callings and employments in excess of Rs 250 per annum
These provisions have to be read in the Act or to be deemed by implication to be there as the Constitution is the paramount law to which all other laws are subject as was the Government of India Act 1935 before January 26 1950
If therefore after the date specified in section 142 A of the Government of India Act or after the commencement of the Constitution a local authority or any of its instrumentalities imposed or imposes a tax which is in excess of the permissible amount it would be exceeding its jurisdiction and a provision like section 843 of the Act will not bar the jurisdiction of a civil court to entertain a suit instituted by a person from whom it is collected for the repayment of the money recovered from him in excess of the permissible amount
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 843 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 142 A of the Government of India Act 1935 permitted or what article 276 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 843 of the Act and therefore the appearances  suit is maintainable
For all these reasons we hold that the High Court was in error in dismissing the appellant s suit
We hold the same in the connected appeal and accordingly allow both the appeals with costs throughout
11964 8 SCR 178
523 Raghubar Dayal J
We have given careful thought to the ques tions of law arising in this appeal but regret we have not been able to agree with the view expressed by brother Mudholkar J in the majority judgment
We need not recapitulate the facts which have been fully set out in the judgment of Mudholkar J
The questions of law which arise for determination are i whether the respondent s collecting the amount in excess of the amount which it could have collected on account of the tax on trade in view of the provisions of article 276 of the Constitution was an act done or purported to be done under the Act  within the meaning of section 481 of the Central Provinces  Berar Municipalities Act 1922 Act 11 of 1922 hereinafter called the Act  and ii whether the suit is barred by section 843 of that Act
The question in short boils down to this whether the expression anything done or purporting to be done  under the Act will cover only those acts which would be in strict conformity with the provisions of the Act or will also cover such acts which the Municipal Committee is competent to do under the Act but in doing which the Committee has in some manner acted beyond the provisions of the Act or beyond any other legal provision
Section 48 of the Act refers to suits against the Committee or any of the other specified persons acting under the directions of the Committee for anything done or purported to be done under the Act
If a suit is for anything done or purported to be done under the Act the necessary conditions laid down in the section are to be satisfied before the institution of the suit
One condition is that the suit is to be instituted after the expiration of two months after the service of a notice in writing to the persons mentioned in sub section
Another is that suit be instituted within six months from the date of accrual of the alleged cause of action
If a suit is not instituted after giving notice or within this period it has to be dismissed
The question then is what is the present suit for And it is only on the determination of the nature of the act to which the present suit relates that it can be said whether the suit is covered by section 48 for not ie whether the act can be said to be done or purported to be done under the Act
The plaintiff claims a decree for the amount alleged to have been illegally collected from him as tax and for a permanent injunction
The illegality of the collection is said to be on account of there being an upper limit for a person  s liability to tax on trade and calling in view of section 142A of the Govern of India Act 1935 shortly referred to as the 1935 Act and article 276 of the Constitution
The limit under the Constitution is Rs 250
It was Rs 50 under the 1935 Act
What was collected from the appellant was the tax assessed on him
According to the appellant the amount assessed exceeded the legal limit and therefore what had been collected in excess of that limit was collected illegally
524 We may now consider the procedure laid down for the collection of tax under the Act before we determine the nature of the alleged excessive collection of tax from the appellant
Section 66 empowers the Committee to impose the taxes enumerated in sub section
1 clause b of subs
1 mentions a tax on persons exercising any profession or art or carrying on any trade or calling within the limits of the municipality
Sub section 2 empowers the State Government by rules made under the Act to regulate the imposition of taxes mentioned in the section and to impose maximum amounts of rates for any tax
The rate of tax fixed by Government Notification dated December 22 1936 was enhanced by another Notification dated April 10 1941
The former rate of one annual was enhanced to four annas
These notifications did not lay down any upper limit for the amount of tax payable by one person to the Municipality
The legality of the imposition is not questioned
The legality of the enhancement was questioned by the appellant through Miscellaneous Petition No 389 of 1954 decided by the High Court on April 12 1955
The appellant prayed by that petition for the issue of a writ prohibiting the Committee from collecting taxes tinder the notification of 1941
The High Court did not hold the notification to be bad in law
What it held was that the tax was invalid to the extent it offended against section 142A of the 1935 Act and that it was also invalid to the extent it offended against article 276 of the Constitution
The writ issued by the High Court was a writ of mandamus prohibiting the Municipality from resorting to the 1941 Notification for the purpose of collecting tax in excess of Rs 250 per annum
The Municipality therefore was empowered to impose tax in accordance with the notification of 1941 and in view of section 142A of the 1935 Act and article 276 of the Constitution the total tax claimable on account of this tax from the appellant could not exceed Rs 50 or Rs 250 respectively during the period when section 142A was in force and later when article 276 came into force
The next step after the imposition of a valid tax according to the Act relates to the assessment of tax on the person s liability to pay it
Section 71 empowers the State Government to make rules under the Act regulating assessment of tax and for preventing the evasion of assessment and section 76 empowers the State Government to make rules regulating the collection of taxes
The rules for assessment and collection of taxes framed in 1936 were notified on December 22 1936
Rule 1 required a person carrying on the trade of ginning or pressing cotton into bales by means of steam or mechanical process to furnish to the Committee annually a return in the prescribed form which required the furnishing of the number of bojhas ginned and the number of bales pressed with the total weight in maunds during the financial year in each case
This information was necessary as the rate of tax related to a bojha of 392 lbs
ginned cotton and a bale of 392 lbs
pressed cotton
525 Rule 4 provided that the tax would be assessed by a sub committee on the basis of the information received under certain rules including r 1
Rule 5 required the communication of the amount of assessment to the assessee
Rule 6 provided that objections to the assessment would be received and considered by the sub committee if presented within a month from the date of communication of the amount of assessment to the assessee and that the decision of the sub committee would be final subject to the confirmation by the general committee
Rule 7 provided that the tax would be payable in one instalment on August 1 each year
Fresh rules were notified in 1941 and these were practically identical with the 1936 rules
It is not alleged that the tax assessed on the appellant during the periods in suit had not been assessed by following the procedure laid down in the rules
It follows from the statutory rules that once the tax is assessed according to The rules the assessee becomes liable statutorily to pay the assessed tax
Section 77 provides how any arrears of tax claimable by the Committee under the Act can be recovered
They can be recovered on an application to a Magistrate by distress and sale of movable property of the defaulter within the limits of his jurisdiction
Sections 77A and 80 provide other procedure for arrears of certain taxes to be realised
Section 83 provides for an appeal against the assessment or levy of or refusal to refund any tax under the Act to the Deputy Commissioner or some other officer empowered by the State Government in that behalf
Sub section
1A allows a person aggrieved by the decision of the appellate authority to apply to the State Government for revision of the decision on the grounds that the decision is contrary to law or is repugnant to any principle of assessment of tax or that the appellate authority has exercised jurisdiction not vested in it by law or has failed to exercise a jurisdiction vested in it by law
Sub section
2 provides for a reference to the High Court by the appellate authority or the revisional authority on its own motion or on the application of any person interested for the opinion of the High Court on any question as to the liability or the principle of assessment of tax if such a question arises on the hearing of the appeal or revision
sub section
3 of section 84 Provides 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 pN4SCI 7 526 Section 85 reads 1 The State Government may make rules under this Act regulating the refund of taxes and such rules may impose limitations on such refunds
2No 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
 It follows from the above provisions that an assessee has to pay the tax assessed and that if aggrieved with the assessment of tax he has to appeal against the assessment order
He can raise questions of law and fact in the appeal
The appellant in the present case could have appealed against the assessment on the ground that the amount assessed exceeded the limits laid down for the tax under section 142A of the 1935 Act if that applied at the time of assessment or under article 276 of the Constitution if the latter applied at the relevant time
His claim for the refund of any amount if paid would arise only after the amount assessed and paid is modified by the appellate or revisional authority
If that amount is not so modified no question for the refund or repayment of any amount paid as tax under the Act arises
The statute provided for the assessment of tax and for its collection in case the assessee did not himself pay the assessed amount according to the rules
The present suit for the repayment of the amount alleged to have been realised illegally is in essence a suit for firstly modifying the amount assessed and then to decree the payment of the amount held to have been paid in excess of the tax as modified by the Court
It follows therefore to our mind that the suit relates to the act of the Committee in assessing the appellant wrongly by ignoring the constitutional provision that the amount payable by a single person to the municipality for such tax was not to exceed a certain limit and that it is not merely with respect to the act of collecting the excess amount
In fact the assessment of the entire tax was one act and so was the collection of the amount assessed
The act of assessing the tax or the consequential act of collecting the amount cannot be broken up into two acts i of assessing the tax upto the legal limit and ii of assessing the tax with respect to the amount in excess of the legal limit
Neither can the act of collection be broken up into two acts i of collecting the amount which can be legally assessed and ii of collecting the amount in excess of the legally realisable amount of tax
The act of assessment or of collection therefore was an act done by the Committee Linder the provisions of the Act though it may be as appears to be the case that it acted wrongly in assessing the tax at an excessive figure and consequently in collecting an amount in excess which could have been legally collected
The suit is therefore fully covered by the provisions of sub s 1 of section 48 of the Act
527 Sub section
2 of section 48 as already stated provides that every such suit ie a suit falling within Sub section
1 of that section shall be dismissed unless it is instituted within six months from the date of the accrual of the alleged cause of action
The suit was instituted in the instant case on December 6 1952 more than 8 months after the date of recovery of most of the amounts alleged to have been illegally recovered from the appellant and clearly the suit for the recovery of such amounts bad to be dismissed
The taxes for the years 1951 52 were recovered in small amounts on January 17 1952 March 13 1952 March 31 1952 and August 27 1952
The suit for the amount recovered on January 17 was also instituted after the period of limitations No notice with respect to the alleged illegal collection of taxes in March and August 1952 had been given to the Municipal Committee as notice was given on January 10 1952 prior to these collections and could not have possibly referred to them
The suit for these amounts also has to be dismissed as the condition precedent for the institution of the suit under sub section
1 of section 48 has not been satisfied
There is another reason which justifies the dismissal of the appellant s suit though the view of the High Court on that point is in favour of the appellant
In view of section 843 the assessment of the tax or the liability of the person assessed or taxed cannot be objected to in any manner or before any authority other than what is provided in the Act
Section 83 provides the procedure by which the assessment of tax can be questioned both on law and facts
The correctness of the assessment cannot be questioned by any other manner and questioning by instituting the suit in a Civil Court would be one such other manner
We have already indicated that in essence the present suit is a suit for the modification of the taxes assessed and for consequential order decreeing the repayment of the amount held to have been collected in excess of the amount so modified
In view of sub section
3 of section 84
exclusive jurisdiction to determine the correctness of the amount assessed is given to the authorities mentioned in section 83
The result is that no other authority can enter into the question of the correctness of the assessment on grounds of law or fact
The present suit is barred from the cognizance of the Civil Court
The views we have expressed find support from what has been decided by the Privy Council and this Court
We would first refer to those cases before dealing with the cases relied on for the appellant in support of the contention that the Committee had no jurisdiction to assess the tax beyond the limit allowed by section 142A or article 276 and that therefore the act of the Committee was an act which could not be said to have been done or purported to have been done under the Act and that it was not necessary for the appellant to take recourse to the procedure laid down in ss 48 and 83 of the Act
528 In Raleigh Investment Co Ltd vs Governor General in Council1 the Privy Council had to construe section 67 of the Income tax Act which provided no suit shall be brought in any civil court to set aside or modify any assessment made under this Act 
The suit giving rise to the appeal before the Privy Council was for a declaration that certain provision of the Act was ultra vires the legislative powers of the Federal Legislature that therefore the appellant before the Privy Council was not liable to be assessed or charged to tax in respect of certain dividends and the assessment was illegal and wrongful for an injunction restraining the department from making assessment in future years in respect of such dividends and for the repayment of the amount said to have been illegally realised on account of the illegal assessment
The Privy Council said at p 62 In form the relief claimed does not profess to modify or set aside the assessment
In substance it does for repayment of part of the sum due by virtue of the notice of demand could not be ordered so long as the assessment stood
 The same can be said with respect to the claim for repayment of the alleged illegal collection of the excess amount from the appellant
The Privy Council further said An assessment made under the machinery provided by the Act if based on a provision subsequently held to be ultra vires is not a nullity like an order of a court lacking jurisdiction
Reliance on such a provision is not an excess of jurisdiction but a mistake of law made in the course of its exercise
 In view of what the Privy Council has said the Committee s overlooking the constitutional provisions in the exercise of its jurisdiction to assess the tax will not make its assessment of the tax an assessment without jurisdiction but would only show that the Committee mad 
a mistake of law in the course of the exercise of its jurisdiction
The Privy Council took into consideration the machinery pro vided in the Income tax Act for the assessee raising objections to the assessment made against him and held that effective and proper machinery was provided by the Act itself for the review on grounds of law
This was however not the reason for their construing section 67 in the way they did
In fact they considered the construction of 67 clear and said Under the Act the income tax officer is charged with the duty of assessing the total income of the assessee
The obvious meaning and in their Lordships  opinion the correct meaning of the phrase assessment made under this Act  is an assessment 1 LR
74 IA 50
529 finding its origin in an activity of the assessing officer acting as such
the circumstance that the assessing officer has taken into account an ultra vires provision of the Act is in this view immaterial in determining whether the assessment is made under this Act 
The phrase describes the provenance of the assessment it does not relate to its accuracy in point of law
The use of the machinery provided by the Act not the result of that use is the test
 These observations fully apply to the expression the assessment of any tax under the Act  in sub section
1 of section 83
It follows that when the Committee made the assessment of the tax on the appellant the assessment was founded on the activity of the Committee acting as the assessing authority and the fact that it overlooked the constitutional requirement is immaterial in determining whether the assess ment is made under the Act
The expression made under the Act  has no relation to the accuracy of the assessment in point of law
The expression assessment of any tax under the Act  in section 83 is equivalent in its content to the expression assessment made under the Act 
Lastly the final observations of the Privy Council in this case indicate that when an exclusive machinery for the determination of the tax is provided by the Act and the tax is assessed by that machinery there arises a duty to pay the amount of tax demanded on the basis of that assessment and that the jurisdiction to question the assessment otherwise than by the use of the machinery expressly provided by the Act would be inconsistent with the statutory obligation to pay arising by virtue of the assessment
The very fact that the appellant let the assessment become final without taking recourse to the procedure of appeal and revision laid down in section 83 of the Act and thus became liable under the statute to pay the amount assessed makes his questioning the correctness of the amount through the Court inconsistent with that obligation
It appears that the Privy Council considered a special provision barring the taking of objection to assessment of tax by any authority to be unnecessary
It said at p 65  The only doubt indeed in their Lordships  mind is whether an express provision was necessary in order to exclude jurisdiction in a civil court to set aside or modify an assessment
 This would meet the contention for the appellant that sub section 3 of section 84 does not specifically refer to the Civil Court and therefore does not specifically bar jurisdiction of the Civil Court from taking cognizance of a suit relating to the assessment of tax
It may also be mentioned that section 843 of the Act by its terms refers to an objection to assessment and not to assessment under the Act or assessment made under the Act 
This makes the provisions of section 843 much wider in scope than those of section 67 of the Indian Income tax Act were
630 The other case we would refer to is Firm  Illuri Subbayya Chetty  Sons vs The State of Andhra Pradesh1
The appellant before this Court in that case sued the State of Andhra Pradesh for a decree for a certain amount on the ground that amount had been illegally recovered from it under the Madras General Sales Tax Act 1939
Section 18A of that Act provides that no suit or other proceeding shall except as expressly provided in the Act be instituted in any Court to set aside or modify any assessment made under the Act
This provision is practically identical in terms with that of section 67 of the Income tax Act which had been considered by the Privy Council in Raleigh s Case2
The contention raised before the Court was that if an order of assessment had been made illegally by the proper authority purporting to exercise its powers under the Act such an assessment could not be said to be an assessment made under the Act
It was also contended that the use of the words any assessment made under this Act  did not cover cases of assessment which purported to have been made under the Act
This Court said at p 759 The expression any assessment made under this Act  is in our opinion wide enough to cover all assessments made by the appropriate authorities under this Act whether the said assessments are correct or not
It is the activity of the assessing officer acting as such officer which is intended to be protected and as soon as it is shown that exercising his jurisdiction and authority under this Act an assessing officer has made an order of assessment that clearly falls within the scope of s 18A The view expressed by this Court is practically the same as had been expressed in Raleigh s Case 2
In fact the only difference between the two cases appears to be that in the Privy Council case the illegality of the assessment was said to lie in basing the assessment on a provision which was said to be ultra vires the legislature while the illegality of the assessment made in the case before this Court lay in the alleged mistake of the assessing officer in construing certain transactions to be transactions of purchases though they were really transactions of sale the tax being leviathan on purchases and not on sales
This Court referred to Raleigh s Case1 at p 764 and did not express an opinion on the view of the Privy Council that even the constitutional validity of the taxing provision could be challenged by adopting the procedure prescribed by the Income tax Act a question which does not arise for consideration in the present case
We are therefore of opinion that the construction put on the expression assessment made under the Act  in these two cases justifies the conclusion that the assessment of tax made on the appellant in this case is covered by sub section
1 of section 83 of the Act and 1  2 74 IA 50 531 amounts to an act done under the Act  for the purposes of sub section
1 of section 48 of the Act
It is therefore unnecessary to determine the scope of the expression an act purported to be done under the Act  in sub section
1 of section 48
We may now briefly deal with the cases relied on for the ap pellant
Before however doing so we may first deal with the case of Poona City Municipal Corporation vs Dattatraya Naresh Deodhar1 decided by this Court
In this case the Poona Municipality had imposed a tax on the amount of octroi duty which had been levied on the goods imported within the Municipal limits but had been subsequently exported out of such limits within the specified periods
The Poona Municipality used to deduct 10 per cent of the amount to be refunded
This deduction was held to amount to a tax on the octroi refund
Such a deduction was imposed as a tax under section 59bxi of Act III of 1901
The tax continued after the 1901 Act was repealed by the Bombay Municipal Boroughs Act 1925
The Boroughs Act was in its turn repealed by the Bombay Provincial Municipal Corporation Act 1949
That Act was applied to Poona on February 15 1950 and thereafter the powers of taxation of the Municipality were governed by section 127 of that Act which authorised the Corporation to impose the various taxes mentioned in that section
A tax on octroi refund was not one of such taxes
It could not come under cl
f which described any other tax which the State Legislature has power under the Constitution to impose in the States 
The State Legislature had no power under the Constitution to impose a tax on octroi refund
It was therefore held by this Court that the amount of tax on octroi refund could not be imposed by the Poona City Municipal Corporation
It was after holding so that reference was made to sub section
4 of section 127 which provided that nothing in that section would authorize the imposition of any tax which the State Legislature had no power to impose in the State under the Constitution and it was said Apart from his absence of power to impose such a tax which is clear from the earlier parts of section 127 we have the categorical prohibition in sub section 4 against the imposition of any such tax by the Corporation
 This reference was to emphasize that the impugned tax could not possibly be imposed under the Act
Sub section 4 appears to have been enacted as a matter of caution
There could be no necessity for sub section 4 as section 127 itself had provided for the taxes which could be imposed
Any tax which was not specified in the section could not possible be imposed by the Corporation
The legislature might have considered the possibility of any of the specified taxes not remaining in future within the legislative list of the State and 11964 8 SCR 178
532 therefore provided that in such a contingency a tax though specified in the section will not be imposed
The provision of sub section
4 did not in any way affect the decision of this Court in holding that the Poona Municipal Corporation could not impose a tax on octroi refund
The other contention for the Poona Municipal Corporation was that the suit was instituted beyond the period of limitation prescribed under section 487 of the 1949 Act
The suit would have been time barred if the act of the Corporation imposing the tax on octroi refund could be held to be an act done or purported to be done in pursuance or in execution or intended execution  of the 1949 Act
This Court held that the tax was not levied in pursuance or in execution of the Act and therefore the benefit of section 487 could not be available to the Corporation
The expression used in section 487 is different from the one used in section 48 of the Act
Apart from this consideration the act of imposing the tax could not be said to have originated from any provision of the 1949 Act and therefore could not possibly be held to be an act done under the 1949 Act
We do not think this case can be taken to support the appellant s contention that the assessment of the tax on it and the consequential collection of the amount in excess of the limit laid down by article 276 of the Constitution was not an act done under the Act
The appellant has mainly relied on the cases decided by the Nagpur High Court and a brief reference may now be made to them
We may refer to the case reported as The Amraoti Town Municipal Committee vs Shaikh Bhikan1 first
The plaintiffs had sued to recover the tax which had been collected from them in excess of the lawful rate
The suit was instituted after the plaintiffs had obtained a declaration that the enhancement of the tax over that rate was illegal
The Municipal Committee had power to impose and enhance the tax
It however had enhanced the tax without following the entire procedure laid down for such enhancement and had omitted to consider the objections filed against the proposed enhancement
The question before the High Court was whether the collection of the tax at the enhanced rate was an act which fell within the ambit of the expression anything done or purported to be done under the Act  which Act it may be mentioned was the CP  Berar Municipalities Act 1929 the very Act with which we are concerned in the present appeal
Niyogi J expressed at p 219 his agreement with the principle that if the Municipal Committee exercised a power which it did not possess it should not be regarded as acting in pursuance of the statute governing its affairs and its acts should not be regarded as being done under the statute and further stated that principle however did not help the Municipal Committee the appellant before him
3 ILR 533 Niyogi J then said after noticing the failure of the Municipal Committee to consider the objections to the proposed taxes Now there can be no question that the municipal committee in imposing and collecting tax at four annas per animal was acting exactly in accordance with section 68
It must be observed that there is a difference between a case when a corporate body exercises a power which is wholly absent and a case where it has power but it exercises it illegally or with material irregularity
In the former case the municipal committee s act from beginning to end is illegal whereas in the latter case the act is quite legal in the beginning but becomes illegal in the end
Again he said In enhancing the tax and collecting it the municipal committee was certainly exercising although irregularly the power conferred on it by section 68 and to that extent it appears to me that the contention that they were not acting under the statute is untenable
 The views expressed by Niyogi J we may say with respect find full support from Raleigh s Case1 and Subbayya Chetty s Case2
Amraoti Municipal Committee s Case3 was in a way on all fours with the present case
In that case the Municipal Committee overlooked the provision of law about considering the objections to the proposed enhancement in tax
In the present case the Committee overlooked the constitutional requirement that the maximum limit of the tax payable by a single individual is Rs 250
The next case is District Council Bhandara vs Kishorilal4
In this case the question before Bose J was whether a suit for the recovery of an amount recovered in excess of what could be legally taxed came within the mischief of section 71 and section 731 of the Central Provinces Local Self Government Act 1920 CP IV of 1920
Bose J said at p 92 It will be observed that both section 79 and the rule are confined to orders and decisions given under the Act
It is impossible to say that an order which contravenes the law or is made in the face of an express statutory prohibition can be said to be under the Act
The words purporting to be given  or made under the Act  are not present in this section and so the difficulty which arises retarding the other point is not present here
 We do not see why an ordinary decision given under the Act be not considered to be an order made under the Act
Neither of the expressions refer to the order or decision being correct or not
174 IA 50
21964 1 SCR 752
3 ILR 4ILR 534 Section 73 of the Central Provinces Local Self Government Act prescribed that no suit shall be instituted etc  for anything done or purporting to be done under that Act unless the prescribed notice be first given
Bose J presumably in view of what he had said earlier in connection with orders and decisions given under the Act said I am clear that what was done here was not done under the Act  so the only question is whether it purported to be done  under the Act In these observationshe seems to have equated the expression given under the Act with done under the Act 
His view as we have already pointed out with reference to something done under the Act does not find support from Raleigh s Case1 and Subbayya Chetty s Case2
BoseJ then considered the content of the expression purported to bedone 
We need not discuss what he says on this point as we haveheld that the assessment made on the appellant was an assessment made under the Act and that the act of illegal collection with respect to the amount in excess was an act done under the Act
The appellant mainly relied on the Nagpur case reported as Municipal Committee Karanja vs New East India Press Co Ltd Bombay
It was held in that case that a suit for refund of a tax illegally imposed by the Municipal Committee was not barred by reason of sections 48 83 and 84 of the Central Provinces Municipalities Act as the Municipal Committee did not act or purport to act under the Act in imposing the illegal tax
Bose Acting CJ delivering the judgment relied on his earlier decision in District Council Bliandara Case1 and held that the claim for the recovery of the tax illegally reallised in excess of the permissible limit were not barred by reason of sections 83 and 84
He then referred to section 48 and after stating that the act of the Municipality when prohibited by law was wholly beyond its jurisdiction and therefore section 48 did not apply said The distinction between a case where section 48 applies and a case where it does not is clearly shown in The Amraoti Town Municipal Committee vs Shaikh Bhikan4
 We have referred to this case and expressed full agreement with the views expressed by Niyogi J there
It appears to us that the full significance of that judgment has been overlooked in Municipal Committee Karanja Case3
We bold that the appellant s suit for the recovery of the tax realised in excess of Rs 250 a year has been rightly dismissed as 1 74 IA 50
2  3 ILR 4 ILR 535 the correctness of the assessment of the tax could not be challenged by a suit in a Civil Court in view of section 843 and as the provisions of section 48 requiring the giving of notice to the Municipality and the institution of the suit within a certain period had not been complied with
We would therefore dismiss the appeal with costs
ORDER In view of the majority judgment the appeal is allowed with costs throughout


Summary:
The appellant was paying a tax at the rate of one anna per unit weight of cotton under section 661b of the Central Provinces Municipalities Act
1922 from 1936
In all 1941 the rate of tax was increased to 4 as
In 1952 the appellant filed a suit for recovery of the excesstax paid within 3 years of the date of suit
It was contended that after the coming into force of section 142A of the Government of India Act 1935 on 1st April 1939 till 25th January 1950 a tax in excess of Rs 50 per annum could not be imposed by the respondent and after the coming into force of the Constitution the upper limit of the tax was raised to Rs 250 per annum under article 276 of the Constitution and that as the appellant was already paying more than this amount per year even at the rate of one anna the enhanced rate of 4 annas was illegal
The trial court decreed the suit for recovery from the Municipal Committee of excess tax paid by the appellant within 3 years of the date of suit but on appeal the High Court held that the suit was bad for non compliance with the requirements of section 48 of the Act according to which a suit for anything done or purported to be done under the Act shill be instituted only after the expiration of 2 months after serving a written notice and within six months from the date of the accrual of the alleged cause of action
In its appeal to this Court the appellant contended that it was a case of recovery of an illegal tax and therefore a claim for its refund fell outside the provisions of section 48
The respondent contended that i since the ban was not upon the rate of tax but upon the excess collection thereof the collection of a tax above the constitutional limit was not without jurisdiction but only illegal or irregular and therefore the suit would be in respect of a matter Purported to be done under the Act and the provision of section 48 would apply and ii on the basis of Raleigh Investment Company Ltd vs Governor
General in Council 74 IA 50 the suit was barred by section 843 of the Act which enacts that no objection shall be taken to any assessment in any other manner than is provided in the Act
HELD Per K Subba Rao J R Mudholkar and V Ramaswami JJ i Since the respondent had no authority to levy a tax beyond what section 142A of the Government of India Act 1935 or what article 276 permitted the assessment proceedings were void in so far as they purported to levy a tax in excess of the permissible limit and authorise
Its collection and the assessment order would be no answer to the suit for the recovery of the excess amount and therefore the suit was maintainable
522G H The Constitution is the fundamental law of the land and it is unnecessary to provide in any law that anything done in disregard of the Constitution is prohibited Such a prohibition has to be read into 500 every enactment and where such prohibition exists or can be implied anything done or purported to be done by an authority must be regarded as wholly without jurisdiction and is not entitled to a protection of the law under colour of which that act was done
512A B 516B C Poona City Municipal Corporation vs Dattatraya Nagesh Deodhar1964 8 SCR 178 followed
iiA tax can be recovered only if it is payable and it would be payable only after it is assessed
It is therefore futile to contend that the ban placed by section 142A of the Government of India Act and article 276 of the Constitution extends only to recoveries and not to an earlier stage
513G It is true that the respondent had jurisdiction to recover an amount up to the constitutional limit
But it cannot be contended that merely because of this the recovery by the respondent of an amount in excess of the constitutional limit was only irregular or at the worst illegal
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
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
But it is the duty of the court to so construe it as to avoid rendering the provision unconstitutional that is to construe section 48 as affording protection only if what was done was something which could legally have been done by the respondent but was wrongly done by it and reject a construction which will invalidate the provision
515B 516B H iiiThe appellant s suit could not be barred even if section 843 of the Act is interpreted in the same way as the Privy Council interpreted section 67 of the Income tax Act in the Raleigh Investment Co s case
Unlike the Income tax Act the Act does not provide a machinery for making a claim for refund or repayment on the ground of the un constitutionality of the levy and the jurisdiction of the civil court in cases of refund is not taken away
Even in the class of cases to which the provisions of sections 83 and 85 of the Act which are the only provisions providing a machinery under the Act for challenging an assessment apply they cannot be said to provide a sufficiently effective remedy to an assessee
A reference to the High Court is only at the discretion of the appellate or revisional authority and the person aggrieved has no right to move the High Court
Besides in the Raleigh Investment Co s case the expression assessment made under this Act was given too wide a construction because it is difficult to appreciate how taking into account an ultra vires provi sion which in law must be regarded as not being a part of the Act at all will make the assessment as one under the Act
517G 518B F H 519A B 520D F 521H The exclusion of the jurisdiction of the civil court is not to be readily inferred but such exclusion must either be explicitly expressed or clearly implied
One of the corollaries flowing from the principle that the Constitution is the fundamental law is that the normal remedy of a suit will be available for obtaining redress against the violation of a constitutional provision
Moreover the provisions of article 265 of the Constitution preclude the levy or collection of a tax except by authority of law which means only a valid law
There was no corresponding provision in the various Acts for the governance of India which preceded the Constitution and the decision in the Raleigh Investment Co s case was given in that context
Further under article 501 226 the Constitution has provided a remedy to a citizen to obtain redress in respect of a tax levied or collected under an invalid law and this remedy will not be affected by any provision like section 67 of the Income tax Act or section 843 of the Act
520G H 521C E Thus when the question merely is whether the assessment had been made according to law the respondent having jurisdiction over the subject matter and the assessee the provisions of section 843 may be a bar to a suit
But where the question raised is as to the jurisdiction of the respondent 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
522E G Per Raghubar Dayal and Bachawat JJ
dissenting The appellant s suit for the recovery of the tax realized in excess of Rs 250 a year was rightly dismissed as the correctness of the assessment of the tax could not be challenged by a suit in a civil court in view of section 843 and as the provisions of section 48 requiring the giving of notice to the respondent and the institution of the suit within a certain period had not been complied with
534H 535A B The suit was in essence a suit for first modifying the amount assessed and then to decree the payment of the amount held to have been paid in excess of the tax as modified by the court
But the act of assessing the tax or the consequential act of collecting the amount cannot be broken up into two acts one upto the legal limit and the other in excess of it
The act of assessment or of collection therefore was an act done by the respondent under the provisions of the Act though it acted wrongly in assessing the tax at an excessive figure and consequently in collecting an amount in excess of that which could have been legally collected
The suit was therefore fully covered by section 48 and had to be dismissed
526E H In view of section 843 exclusive jurisdiction to determine the correctness of the amount assessed is given to the authorities mentioned in section 83
The result is that no other authority can enter into the question of the correctness of the assessment on grounds of law or fact and therefore the appellant s suit was barred from the cognizance of the civil court
527G Raleigh Investment Co Ltd vs Governor General in Council LR 74 IA 50 and Firm of Illuri Subbayya Chetty  Sons vs State of Andhra Pradesh   followed
Poona City MuniciPal Corporation vs Dattatraya Nagesh Deodhar   distinguished