A. N. SURTI, M. P. THAKKAR, J.

( 1 ) AN interesting point of law is involved in the present appeal viz. Whether a suit can lie against the municipality after six months next after the accrual of the cause of action in respect of over-payment of terminal tax paid by a tax payer to a municipality under a bonafide mistaken belief in regard to the rate of terminal tax levied charged and collected by the municipality.

( 2 ) IN order to appreciate the aforesaid point of law a few relevant facts giving rise to the present appeal may be stated. The appeal is directed by the original plaintiff against the judgment and decree passed in favour of the respondent Bhavnagar municipality thereinafter referred as the respondent municipality ). The appellant-plaintiff filed Special Civil Suit No. 22 of 1968 in the Court of the learned Civil Judge (Senior Division) Bhavnagar against the respondent-municipality for recovery of Rs. 14 278 74 being the excess amount of terminal tax received and collected by the respondent municipality on the iron scraps brought by the appellant-plaintiff within the limits of the respondent-municipality for consumption in their rolling mills.

( 3 ) THE appellant-plaintiff imported iron scrap within the limits of the respondent municipality and the said scrap was liable to a terminal tax levied by the respondent municipality from April 10 1965 to February 26 1968 The respondent-municipality charged the terminal tax at the rate of four annas for Bengali Maund on the iron scrap and thus collected Rs. 34 537 for the aforesaid period from the appellant-plaintiff. It was alleged by the appellant-plaintiff that the respon- dant municipality was entitled to recover terminal tax at the rate of two annas per Bengali Maund and not at the rate of four annas per Bengali Maund as charged and collected by the respondent municipality. In sub- stance the appellant-plaintiff alleged that the respondent municipality wrongly charged the terminal tax on the iron scrap imported by them at the rate of four annas per Bengali Maund. The plaintiff further averred in their plaint that the correct rate at which the goods imported should have been charged is the rate of two annas per Bengali Maund. Shortly stated on the aforesaid facts the appellant-plaintiff prayed that they are entitled to Rs. 17 278 being an excess amount of terminal tax rece- ived and collected by the respondent-municipality.

( 4 ) THE respondent-municipality resisted the suit by raising several contentions. In course of the proceedings before the learned trial Judge the respondent-municipality by its pursis Ex. 45 and 46 admitted that it had collected Rs. 34 557 as terminal tax between April 10 1965 to February 26 1968 from the appellant-plaintiff. The respondent-municipality also filed a pursis Ex. 30 stating that if admitted that the respondent- municipality was entitled to charge for the terminal tax for the goods in question at the rate of two annas per Bengali Maund. In the same pursis the respondent-municipality stated that the only point which survived for determination in the trial Court was as to the period of limitation and that no other issues required any decision of the trial Court.

( 5 ) IN view of what has been stated above the relevant material issue before the learned trial Judge was :- Whether the suit is within time ?

( 6 ) THE learned trial Judge took into consideration sec. 253 of the Gujarat Municipalities Act 1963 and came to the conclusion that a sub- stantial part of claim was time barred and the plaintiff was only entitiled to recover Rs. 741-62ps. from the respondent-municipality. He also direc- ted that the parties should bear their own costs of the suit. In course of his judgment in paragraph is the learned trial judge observed that the excess charge was collected by the defendant-municipality on an erroneous misclassification of the goods and so under the rules the said charge was necessarily wrong. But had the rules permitted the said charge i

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