ivil Appeal Nos
372 382 of 1969
Appeals by Special Leave from the Judgment and order dated 10 10 1968 of the Rajasthan High Court in CSA Nos 18 and 29 27 28
30 35 of 1960 and 54 and 58 of 1961
section N Jain and section K Jain for the Appellants
B P Maheshwari and Suresh Sethi for the Respondent
The Judgment af the Court was delivered by SHINGHAL J These appeals by special leave arise out of a common judgment of the Rajasthan High Court dated October 10 1968 by which the suits which were filed by the present appellants were dismissed in pursuance of the earlier judgment of the same court dated November 9 1964 on the ground that they were governed by section 1792 of the Rajasthan Town Municipalities Act 1951 hereinafter referred to as the Act and were barred by limitation
The facts giving rise to the appeals were different in details but they were examined in the High Court with reference to the common questions of law which arose in all of them and formed the basis of that Court s decision against the plaintiffs
We have heard these as companion appeals and will decide them by a common judgment
It is not necessary to give the detailed facts of all the cases as it will be enough to refer to the suit which was filed by Ms Surajmal Banshidhar and the developments connected with it in order to appreciate the controversy
The plaintiff firm referred to above carried on business in pakka arat and exported goods of various kinds from Ganganagar
The Municipal Board of Ganganagar realist export duty by way of ter 171 minal tax on the exported goods
The plaintiff therefore raised a suit on October 19 1957 challenging the Board s right to impose or to reales any export duty during the period June 5 1954 to March 10 1957 amounting to Rs 10729 
It however confined the suit to the recovery of Rs 10000 alongwith interest and gave up the balance
The Board denied the claim in the suit and pleaded inter alia that the levy of the terminal tax was in accordance with the law and the suit was barred by limitation
The trial court rejected the defence and decreed the suit and its decree was upheld by the District Judge on appeal
Similar decrees were passed in the other suits for various sums of money
The Board took the matter to the High Court in second appeals
The appeals were heard by a Single Judge who while deciding that the suits were governed by section 1792 of the Act referred the question on the legality of the levy to a larger Bench
A Full Bench of the High Court held that the levy of the terminal tax was illegal and sent the cases back to the Single Judge who allowed the appeals only for those amounts which were found to be within limitation under section 1792 of the Act and dismissed the other suits
The plaintiffs obtained special leave and have come up to this Court in these circumstances
The question which arises for consideration is whether the suits fall within the purview of section 1792 of the Act
The first two subsection of section 179 which bear on the controversy read as follows 179
Limitation of suits etc
1 No suit shall be instituted against any municipal board president member officer servant or any person acting under the direction of such municipal board chairman 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 has been in the case of a municipal board delivered or left at its office and in case of a chairman 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
2 Every such suit shall unless it is a suit for the recovery of immovable property or for a declaration of title thereto be dismissed if it is not instituted within six months after the accrual of the alleged cause of action
 The question therefore is whether the illegal levy of terminal tax assuming that it was illegal as held by the High Court could be said to 172 be a thing done or purporting to be done under the Act
A similar question arose for the consideration of this Court ill Poona City Municipal Corporation vs Dattatraya Nagesh Deodharl with reference to the provision in section 127 4 of the Bombay Provincial Municipal Corporation Act 1949 and it was held that if the levy of a tax was prohibited by the Act concerned and was not in pursuance of it it could not be said to be purported to be done in pursuance of execution or in tended execution of the Act 
 It was observed that what was plainly prohibited by the Act could not be claimed to be purported to be done in pursuance or intended execution of the Act
 It was therefore held that the suit was outside the purview of the section 1274 and was not barred by limitation
We are in respectful agreement with that view and we have no hesitation in holding in the circumstances of the pre sent cases which are governed by a provision similar to section 1274 or the Poona City Municipal Corporation Act that the suits did not fall within the purview of section 179 of the Act and were not barred by limitation
It may be mentioned that it has not been argued before us and is nobody s case that the suits would be barred by limitation even if they did not fall within the purview of section 1792 of the Act
The decision of the High Court to the contrary is not correct and will have to be set aside
It has however been argued on behalf of the respondents that the High Court erred in taking the view that the levy of the terminal tax was illegal and our attention has been invited to the relevant provisions of the law including the Bikaner State Municipal Act 1923 article 277 of the Constitution and section 2 of the Act
It is not in controversy before us that the Bikaner State Municipal Act 1923 authorised the levy of terminal tax and such a tax was levied by the Ganganagar Municipal Board under the authority of that law upto January 26 1950 when the Constitution came into force
On and from that date the power to levy export duty vested in the Parliament but article 277 saved that and some other taxes as follows 277
Any taxes duties cesses or fees which immediately before the commencement of this Constitution were being law fully levied by the Government of any State or by any municipality or other local authority or body for the purposes of the State municipality district or other local area may not withstanding that those taxes duties cesses or fees are mentioned in the Union list continue to be levied and to be applied to the same purposes until provision to the contrary is made by Parliament by law  1  173 it was therefore permissible for the Municipal Board to continue to levy A the terminal tax until provision to the contrary was made by Parliament by law
But it so happened that the Bikaner Municipal Act 1923 was repealed and the Act was brought into force with effect from December 22 1951
Section 2b of the Act which dealt with the repeal of the Bikaner Act and the saving of some of its provisions expressly provided that on the coming into force of the Act the laws and enactments specified in the First Schedule of the Act shall be repealed in so far as they relate to the Town Municipalities covered by the Act
So as the Bikaner State Municipal Act 1923 was included in the first Schedule it was repealed by the aforesaid section 2
That section however contained a proviso clause b whereof was to the following effect b all town municipalities constituted under the said laws or enactments and members appointed or elected committees established limits defined appointments rules orders and bye laws made notifications and notices issued taxes imposed contracts entered into and suits and other proceedings instituted under the said laws or enactments or under and laws or enactments thereby repealed shall so far as may be and so far as they relate to town municipalities be deemed unless the Government directs otherwise to have been respectively constituted appointed elected establish ed defined made issued imposed entered into and instituted under this Act
 The repeal did not therefore affect the validity of those taxes which had already been imposed and which could be deemed to have been imposed under the Act unless there was a direction to the contrary by the State Government
It is quite clear from the provisions af the Act and is in fact not disputed before us that the terminal tax in question could not be imposed under any of the provisions of the Act
Its levy could not therefore be saved by clause b of the proviso to section 2 of the Act
On the other hand it could be said with justification that the State Legislature had decided to discontinue the levy by excluding it from the purview of the saving clause
The further levy of the tax therefore became illegal and it was not permissible to continue it any longer under article 277 which merely gave the authority concerned the option to continue the levy if it so desired
So as the levy of the tax after December 22 1951 was illegal there is nothing wrong with the view taken by the High Court that the amounts 174 paid by the plaintiffs by way of terminal tax were recoverable by the suits which have given rise to these appeals and there is no force in the argument to the contrary
The appeals are allowed with costs the decrees of the High Court are set aside and those of the lower appellate court restored
PBR Appeals allowed


Summary:
The respondent Board realised terminal tax on goods experted by the appellants
In suits filed by the appellants for refund of the amounts which they claimed were collected without authority of law the respondent Board pleaded that the levy was in accordance with law and that the suits where barred by limitation
The trial court decreed the suits and on appeal the District Judge affirmed the trial Court s decrees
In second appeal the High Court held that the levy was illegal
The High Court however allowed the appeals in respect of those amounts which were found to be within limitation under section 1792 of the Act and dismissed the others
On the question whether the levy could be said to be a thing done or purported to be done under the Act
Allowing the appeal  HELD The suits did not fall within the purview of section 179 of the Act and were not barred by limitation
172 D 1
a It is well established that if levy of a tax is prohibited by an Act and is not in pursuance of it it could not be said to be purported to be done in pursuance of the execution or intended execution of the Act
172 B Poona City Municipal Corporation vs Dattatraya Nagesh Deodhar  followed
b The terminal tax could not be imposed under any of The provisions of the Act
The High Court was right in holding that the amounts  paid by the appellants by way of terminal tax were recoverable by the suits
173 F G 174 Al 2
The Bikaner State Municipal Act 1923 which was the predecessor of the present Act authorised the levy of terminal tax and the Board accordingly levied the tax until January 26 1950
With the coming into force 12 SCI78 170 of the Constitution by virtue of article 277 it was permissible for the Board to continue to levy the terminal tax until provision to the contrary was made by Parliament by law
But with effect from December 22 1951 the Bikaner Act was repealed and the present Act was brought into force
the repeal however did not affect the validity of those taxes which had already been imposed and which could be deemed  to have been imposed under the Act
But the provisions of the Act the clear that the terminal tax in question could not be imposed thereunder
The levy could not therefore be saved by cl
b of the proviso to section 2
on the other hand it is clear that the State Legislature had decided to discontinue the levy by excluding it from the purview of the saving clauses
The further levy of the tax therefore became illegal and it was not permissible to continue it any longer under article 277 which merely gave the authority concerned the option to continue to levy if it so desired
173A F G