- (1.) The short point which arises in this case is whether the notice under Section 535 of the Bengal Municipal Act to the Municipality must be given in case of reference under Section 135(2) of the Indian Railways Act (IX of 1890) regarding the assessment of the Railway properties by any municipality. The Tribunal under the Act having held against the Railway, the Railway moved the present application. The fact which is relevant for the purpose of disposing of the case is as follows : The Eastern Railway has lands and buildings, situate within the limits of the Barasat Municipality, in respect of which the Railway pays tax to the Municipality as assessed from time to time. The Railway submitted return in 1961 showing the area of land to be 13 bighas which was accepted by the Municipality, but subsequently through misapprehension of facts the Railway submitted returns for the subsequent periods erroneously showing the lands measuring about 64 bighas 2 cottahs which the Municipality accepted and assessment was done accordingly. With effect from the first quarter of 1970-71 the Municipality sought to assess the lands and buildings on the basis of returns submitted showing the area of lands to be 64 bighas 2 cottahs. Before the Review Committed the Railway submitted that the area of land shown in its return dated November 24, 1969, was not correct whereupon the Railway and the Municipality held joint verification and it was found by the Surveyor Ural the urea was 11 bighas and 13 cottahs and not 64 bighas and 2 cottahs as mentioned in the return. The aforesaid discrepancy was brought to the notice of the Review Committee by written objections filed on behalf of the Railway at the time of hearing and also the Railway objected to the fixation of ground rent at Rs. 150 per bigha per annum instead of Rs. 65 per annum per bigha and thereby fixed the tax at Rs. 38,920 and the Review Committee ordered likewise. As dispute arose regarding the assessment, the Railway made a reference under Section 135 read with Section 3(2) of the Indian Railways (Local Authorities Taxation) Act XXV of 1941. Section 3 of the Act is in the following terms: 3. Liability of Railways to taxation by local authorities: (1) In respect of property vested in the Central Government, being property of a Railway, a Railway administration shall be liable to pay any tax in aid of the funds of any local authority, if the Central Government, by notification in the Official Gazettee, declares it to be so liable. (2) While a notification under Sub-section (1) is in force, the Railway administration shall be liable to pay to the local authority either the tax mentioned in the notification or in lieu thereof such sum, if any, as a person appointed in this behalf by the Central Government may have in regard to the services rendered to the Railway and all the relevant circumstances of the case, from time to time determine to be fair and reasonable. The person so appointed shall be a person who is or has been Judge of a High Court or a District Judge.
(2.) In the present case, there is no dispute that the liability has been fastened with the Railway regarding taxation by the Municipality. There is no dispute that the tax was being paid by the Petitioner to the opposite parties. The dispute is regarding the quantum of tax as fixed by the Municipality.
(3.) The District Judge who was appointed under Section 3(2) of the Act held that as no notice under the Municipal Act was given to the Municipality the proceeding could not be continued.;