JUDGEMENT :- The above second appeal filed by the Barsi Municipal Council, at the material time constituted under the Bombay Municipal Boroughs Act, 1925 up to June 15, 1966 and thereafter under the Maharashtra Municipalities Act, 1965, raises two points, firstly, whether the civil Court had jurisdiction to entertain the present suit for a declaration that the levy for apportionment of property or other taxes on the plaintiff-respondent in respect of the suit property is illegal and ultra vires and for a permanent injunction restraining the defendant from recovering from the plaintiff the arrears and future taxes; and, secondly, whether the two Courts below were right in holding that the levy of the taxes on the respondent-plaintiff was ultra vires the powers of the Barsi Municipal Council.

2. The plaintiff filed the suit on Nov. 11, 1967, seeking the above reliefs on the basis of the following allegations :-

3. City Survey No. 2555 is an open plot in Barsi Town belonging to the plaintiff. On July 23, 1967, one Dhanraj Nandram Soniminde executed a registered rent-note in favour of the plaintiff, which is produced at Ex. 30. It was a building lease for a period of ten years. The open plot was taken by him for constructing a factory at a rental of Rs. 700/- per annum. As per the terms of the rent-note, Soniminde was to construct a building suitable for his factory and office after taking non-agricultural permission. He accordingly constructed a building in the year 1959 and the plot was no longer an open plot but was factory premises.

4. The Barsi Municipal Council had levied property taxes on this property in 1961-62 On the basis of the annual letting value of Rs. 700/-, the plaintiff was called upon to pay taxes as follows :-

Rs .

125.50 1961-62.

Rs .

125.50 1962-63.

Rs .

140.00 1963-64.

Rs .

139.00 1964-65.

Rs .

139.00 1965-66.

Rs .

139.00 1968-67.

139.00 1967-88.

Rs .

Rs .

947.00

5. According to the plaintiff, the levy of these taxes on him was ultra vires and illegal and he did not, therefore, pay the taxes for the following reasons :-

(1) That the Municipal Council had not only levied all the taxes on the building constructed by Dhanraj Soniminde but also separately on the open land upon which the said building was constructed, though no land was left open after the construction of the building.

(2) That the levy of taxes on the building and also the levy of taxes on the land under the building was not warranted by any of the provisions of the Bombay Municipal Boroughs Act, 1925 as well as the provisions of the Maharashtra Municipalities Act, 1965.

(3) The Rules framed by the Barsi Municipal Council did not envisage levy of tax on buildings as well as land covered by the buildings and this amounted to double taxation.

(4) That the Municipal Council had also levied and recovered property and other taxes on C.T.S. No. 2555 from Soniminde, who was primarily liable to pay the taxes and, therefore, in respect of the same property, the Municipal Council could not serve on the plaintiff a notice of demand dated Aug. 2, 1967 (Ex. 31), calling upon the plaintiff to pay Rs. 980.15 and purporting to be a notice under the Bombay Municipal Boroughs Act, 1925 with a note indicating that the action would be taken under the Maharashtra Municipalities Act, 1965.

The plaintiff, therefore, filed the suit claiming the aforesaid reliefs.

6. The Municipal Council resisted the suit by contending that the suit was not tenable as the plaintiff ought to have filed an appeal before the Magistrate. It denied the claim of the plaintiff and contended, inter alia, that it was not made aware of the terms of the lease. It denied that the tenant constructed the building on the entire open space and submitted that the area of the open space was more than the built portion; and hence it assessed the open space and the built portion separately. It denied that there was any double taxation and contended that S.125(2) of the Maharashtra Municipalities Act, 1965 was not applica

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