The assessment list prepared under S. 78 of the Bombay Municipal Boroughs Act, 1925, which does not state the valuation on which the property to be rated is assessed and which is not subjected to the procedure referred to in Ss. 80 and 81 of the Act, is a null and void assessment-list so as to create a liability on the tax-payers to pay the property rate.

Gajendragadkar, J. :- This appeal arises from a dispute between the Pratap Spinning, Weaving and Manufacturing Company; Limited, Amalner and the Borough Municipality of Amalner. The Pratap Spinning, Weaving and Manufacturing Company, Limited, had sued the Municipality in the Court of the Civil Judge, Senior Division, at Dhulia, for a declaration that the claim made by it on 3-11-1948, by its bill No. 3 and R. 3 (2) of its General Property Tax Rules on which the said bill was based were ultra vires, illegal and void and for an injunction restraining the Municipality from making any claim or demand on the strength of the said rule. The company had also claimed a refund of Rs. 18,931-11-0 which had been paid by the company under protest on 20-11-1948, in pursuance of the aforesaid bill. To the suit filed by the company the Borough Municipality of Amalner was impleaded as defendant 1 and the Province of Bombay defendant 2.

2. The plaintiff is a company registered under the Indian Companies Act and it owns and possesses lands and buildings for its factories at Amalner bearing City Survey Nos. 3264 to 3267. The Municipality in exercise of its powers to impose a general tax on lands and buildings situated within its limits framed rules for the purpose of levying the said tax. Rule 3 (2) of the said rules prescribes the basis and the manner in which it was decided to levy the tax on the factory premises. A flat and uniform rule has been framed by the Municipality for the purpose of ascertaining the annual letting value of the factory premises and they have decided to recover a tax at the rate of 20 per cent. of this valuation. The case for the company was that the rule thus made was ultra vires of the Municipality and was otherwise illegal and invalid because it was capricious, arbitrary and unreasonable. The plaintiff further alleged that the demand made by the bill issued by the Municipality against the plaintiff was illegal for the reason that the procedure prescribed by the Bombay Municipal Boroughs Act, XVIII [18] of 1925, in that behalf had not been followed.

3. The Municipality resisted the plaintiffs claim and pleaded that R. 3 (2) was intra vires and was neither capricious, nor arbitrary or unreasonable. The Municipality denied the plaintiffs allegation that the procedure laid down by the Bombay Municipal Boroughs Act had not been followed, and it was urged in defence that the said procedure had been substantially complied with. The Province of Bombay contended that they were neither a necessary nor a proper party since no relief was claimed against them. Without prejudice to this contention they supported the plea of the Municipality on the merits.

4. On these pleadings the learned Judge framed appropriate issues. He found that defendant 2 was a proper party to the suit. On the merits he held that in assessing the rate for the plaintiffs property the Municipality had not followed the proper procedure prescribed by the Act and that in consequence the assessment levied against the plaintiff was ultra vires and void. He also held that R. 3 (2) which was challenged by the plaintiff was ultra vires mainly on the ground that it was capricious, arbitrary and unreasonable. On these findings he decreed the plaintiffs claim for declaration and injunction and directed defendant 1 to refund the amount paid by the plaintiff under protest. It is this decree which has given rise to the present appeal by the Municipality.

5. On behalf of the appellant Mr. Kotwal has raised for our decision the same points as were in issue in the trial Court. He has argued that the learned Judge was wrong in holding that the assessment levied by the Municipality against the company was invalid because the Municipality had not followed the procedure prescribed by the Bombay Municipal Boroughs Act in that behalf, and he has further contended that it is clearly erroneous to hold that R. 3 (2) ultra vires. Before dealing with these points it would be conv