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 1000 gallons. During 1940-1948, there had been no levy of sales tax on the charges thus collected by the Port Trust, the Government having exempted the Port Trust from such levy. The exemption, however, was cancelled on 27th October, 1948. After some correspondence, the Deputy Commercial Tax Officer, Harbour Division, Madras, by his letter dated 8th June, 1949, called upon the Chairman of the Port Trust to pay tax on sale of water from 1st July, 1949. The Port Trust did not accept the claim; they, however, paid under protest a sum of Rs. 3, 761-13-3 on the amount of Rs. 2, 40, 757, which was realised as charges for supply of water to the ships in the year 1948-49. Thereupon, the suit, out of which this section appeal arises, was filed by them to recover the sum of Rs. 3, 745 on the ground that the levy was unauthorised. The respondent contested the claim and stated that the levy was proper, as the Port Trust was a dealer who sold goods, and was, therefore, liable to be assessed to sales tax. They also contended that, under section 18 of the Sales Tax Act, a suit for recovery of the tax paid could not be instituted after a period of six months from the date of the order, and that, therefore, the suit was barred.The learned First Additional Judge of the City Civil Court (later designated as the Assistant City Civil Judge) who tried the suit held that the Port Trust could not be deemed to be dealers, and would, therefore, not be liable to pay a tax. But he held that, as the suit was filed on the 23rd August, 1950, all payments made prior to a period of six months therefrom would be barred by limitation, and passed a decree for the payment made within the aforesaid period, namely, a sum of Rs. 1, 554 with proportionate costs.

The State of Madras filed an appeal to this Court against the decree and judgment of the trial Court. The Port Trust filed a memorandum of cross-objections, claiming that they would be entitled to recover the sum collected by them by way of sales tax by the respondent. The appeal and memorandum of cross-objections were transferred by this Court to the City Civil Judge for disposal.

The learned Additional City Civil Judge held that, in purchasing water from the Corporation and levying charges therefor, the Port Trust would be a dealer within the meaning of section 2(b) of the Madras General Sales Tax Act as, in his opinion, it was not necessary that there should be an element of profit in the transaction. The learned Judge disagreed with the view of the trial Court on the question of limitation, and held that, as the entire claim was within the period limited by Article 62 of the Limitation Act, there would be no bar of limitation. In the view that the levy was authorised by the statute, the learned Judge allowed the appeal, and dismisse