RAMACHANDRA IYER, J.

This appeal raises a question regarding the liability of the Trustees of the Port of Madras to sales tax in respect of the charges levied and collected by them for water supplied to the ships that anchor at the Madras Port. Under section 171 of the City Municipal Act, the Corporation of Madras is bound to supply the Port Trust with water on such terms as to payment and subject to such conditions of supply as shall be determined by the Council of the Corporation, subject to appeal to the State Government. The water supplied by the Corporation is stored by the Port Trust authorities in tanks specially constructed for the purpose and therefore utilised for the purposes of the Port. One of the purposes, for which water is utilised, is to supply the same to the ships that call at the Port of Madras. The Corporation charges the Port Trust at the rate of Rs. 4-7-0 per 1000 gallons of water supplied by it. The Port Trust, in turn, charges the ships which take water on the quayside at the rate of Rs. 5-8-0 per 1000 gallons. But, if the ships are outside the Harbour, water is supplied to them through barges, and the charge levied is at the rate of Rs. 8 per 10