JUDGMENT

UNTWALIA, J.:— A substantial question of law as to the interpretation of Art. 285 of the Constitution of India is involved in this appeal by certificate granted by the Mysore High Court (now the Karnataka High Court).

2. The City Municipal Council, Bellary filed a suit against the Union of India as owner of the Southern Railway in the Court at Bellary for a decree for the arrears of all taxes etc. amounting to Rs. 38,988/-. The claim in the suit was on account of Municipal taxes due in respect of certain buildings and land owned by the said Railway within the Municipal limits of Bellary. It was for the period April 1, 1957 to March 31, 1963. Since the Union of India denied its liability to pay any tax to the Municipal Council of Bellary in respect of the property in question on the ground of Article 285 of the Constitution, the High Court withdrew the suit under Art. 228 from the Bellary Court and has itself disposed it of. It has passed a decree against the Union of India as owner of the Southern Railway in favour of the Municipal Council, Bellary. Hence the former has preferred this appeal to this Court.

3. The District of Bellary was a part of the erstwhile Madras State. Under S. 4 of the Andhra State Act, 1953. Central Act XXX of 1953 a good portion of the Bellary District was added to the State of Mysore (now Karnataka) on and from Oct. 1, 1953 whereupon it ceased to be a part of the State of Madras. The Bellary Municipal Council was realizing certain municipal taxes in respect of the Railway properties in accordance with S. 81 of the Madras District Municipalities Act, 1920. The property belonged to the erstwhile Madras and Southern Mahatta Railway owned by a non-Government company. Subsequently the said Railway was taken over by the Central Government. But even thereafter taxes were being realized by the Municipal Council in accordance with the Madras Act.

4. Previously by a notification dated the 14th Feb., 1929 issued under S. 135 of the Indian Railways Act, 1890 the liability of the Madras and Southern Mahratta Railway to pay the taxes to Bellary Municipality was declared and thus the Municipal Council was realizing taxes in accordance with the Madras District Municipalities Act and the notification aforesaid. When the Railway came to be owned by the Central Government, S. 154 of the Government of India Act, 1935 crated a difficulty and especially in relation too the buildings constructed after coming into force of the said Act. In absence of a Federal Law creating the liability of the Government Railway to pay any Municipal tax, no such tax could be realized. According to the Railway (Local Authorities Taxation) Act, 1941 was passed. Under S. 4 of this 1941 Act, a notification dated the 18th June, 1946 was issued by the Central Government revoking the earlier notification of the Government of India in the Railway Department issued on the 14th Feb., 1929 in respect of the Bellary Municipality and on the sane date i.e. the 18th June, 1946 a fresh notification under S. 3 of the 1941 Act was issued by the same Government declaring that the administration of the Madras and Mahratta Railway shall be liable to pay in aid of the funds of the local authorities specified in col.1 of the Schedule annexed to the notification, which included Bellary Municipality. Thus the liability of the Railway to pay the Municipal tax was continued or created by the fresh notification issued under S. 3(1) of the 1941 Act. At the foot of this notification, an explanation was added specifying the amounts of the property tax, water and drainage tax as payable under the Madras District Municipalities Act, 1920. The Railway continued to pay the tax of the Bellary Municipalities until 2-10-1953 when it was part of Madras State. Even thereafter the Madras law continued to be applicable to the Bellary area which was transferred of the Mysore State till 24-10-1955. as per S. 53 of the Andhra State Act. On 24-10-1955 the Mysore laws (Extension to