The Railways (Local Authorities Taxation) Act, 1941, Sec. 4, read with the main paragraph of Sec. 154 of the Government of India Act, 1935, and Clause (1) of Article 285 of the Constitution, allows for the taxation of railway properties constructed after 1st April 1937, in accordance with a notification issued under Sub-section (1) of Sec. 135 of the Indian Railways Act, 1890.

A.B.N.Sinha, J.

1. The Union of India as the owner of the Eastern Railway Administration is the petitioner in this case and has obtained a rule from this Court calling upon the respondents, namely, the Commissioners of Sahebganj Municipality through its Chairman to show cause why the notices dated 28th March, 1961 and 23rd December, 1961 which are annexures 3 and 5 to this petition demanding municipal taxes from the petitioner with effect from the 1st April, 1961 in respect of as many as 113 buildings, some constructed after the 31st March, 1937 and others after the 25th January, 1950 by the aforesaid Eastern Railway Administration within the limits of Sahebganj Municipality and the order dated the 21st December, 1961 passed by the Review Committee of Sahebganj Municipality on the application filed by the Eastern Railway Administration for review of the aforesaid assessment under Sec.116 of the Bihar and Orissa Municipal Act, 1922, be not quashed and for issue of a writ in the nature of certiorari for quashing the same. The respondents have shown cause and have resisted this application.

2. Annexure 3 to this application purports to be a copy of the notice dated the 28th March, 1961 under Sec.115(2) of the Bihar and Orissa Municipal Act given to the Divisional Superintendent, Eastern Railway, Howrah, under the signature of the Chairman, Sahebganj Municipality, of the assessment of the buildings constructed after the 1st of April, 1937 by the Eastern Railway within the limits of that Municipality. The Railway Administration, thereafter, filed an application for review of the said assessment and urged that the structures in question were exempt from taxation under the provisions of Sec.154 of the Government of India Act, 1935 read with Article 285 of the Constitution of India, and, as such, they were not liable to pay any municipal tax in respect of the buildings constructed after the 1st April, 1937.

The Review Committee by its order dated the 21st December, 1961, a copy whereof is part of Annexure 5 to this application, rejected the review application and desired the Chairman to proceed with the realisation of the outstanding Municipal taxes from the petitioner representing the Eastern Railway. Accordingly, under a letter dated the 23rd December, 1961 (a copy whereof is also Annexure 5 to this application), the Chairman, Sahebganj Municipality, demanded payment of the Municipal taxes assessed in respect of the buildings constructed after the 31st March, 1937. Thereafter, another unsuccessful attempt appears to have been made by the General Manager, Eastern Railway, Calcutta, to get the assessment order cancelled, and the respondents finally called upon the Eastern Railway authorities to pay the Municipal taxes as assessed and outstanding, otherwise recourse to appropriate legal proceedings for their recovery would become necessary. In these circumstances, the petitioner moved this Court under Articles 226 and 227 of the Constitution and has obtained rule nisi as mentioned above.

3. It has been contended by Mr. B. C. Ghose, appearing on behalf of the Union of India, that in view of the provisions of Sec.154 of the Government of India Act, 1935 and Article 285 of the Constitution, the buildings constructed after the 31st March, 1937 and 25th January, 1950 were exempt from local taxation, and the notification dated the 24th August, 1911 under Sub-section (1) of Section 135 of the Indian Railways Act, 1890 , was wholly ineffective so far as the buildings not in existence before the 31st March, 1937 were concerned. On behalf of the respondents, on the other hand, it has been urged that the present case, like the case of the Gumti which had been constructed at Motihari Railway Station after the 1st of April, 1937, and the assessment in respect of which was the subject-matter of the decision in the case of Dominion of India V/s. Motihari Municipality, AIR 1954 Pat 568, was really governed by Sec. 4 of the Railways (Local Auth