The main legal point established in the judgment is the application of the Limitation Act, Article 62, in determining the limitation period for profession tax claims. Additionally, the judgment emphasizes the reasonableness of municipal authorities' discretion in increasing licence-fees based on the cost of supervision and special measures necessitated by specific trades.

Wadsworth, J.

1. The appellant was the plaintiff in a suit to recover licence-fees and profession tax alleged to have been wrongfully levied by the defendant, the Municipal Council, Hospet, during the period from October, 1933 to September, 1937. The plaintiff company started to build a sugar factory in Hospet in October, 1933. Profession tax was levied on the Company from the half year ending 31st March, 1934, onwards. It seems to be clear that the plaintiff company did not actually start manufacture until the beginning of 1935 and with reference to the first years profession tax the question is really one of limitation. The learned District Judge has found on the authority of the decisions in the Municipal Council, Dindigul v. The Bombay Company, Limited (1928) 56 M.L.J. 525 : I.L.R. 52 Mad. 207. and The Rajputana Malwa Railway Co-operative Stores, Ltd. v. The Ajmere Municipal Board I.L.R. (1910) All. 491. , that Article 62 of the Limitation Act applies and that the suit with reference to the first years assessment is barred by limitation. An attempt has been made to argue that Article 62 applies only to an action for money had and received in the strictest sense of the term as understood in the Courts of Common Law in England and that when the action is based not on any implied contract, but on the principle of ex aequo et bono Article 62 would have no application and the residuary Article 120 would apply. We have been referred to no authority in support of this argument and it seems to us that Article 62 is intended to apply to all actions for money had and received to the use of the plaintiff whether they be actions which may be deemed strictly to be based on implied contracts or whether they be merely to enforce an equitable claim to the return of the money had and received. We therefore agree with the learned District Judge that the claim in so far as it relates to the first years profession tax is barred by limitation. We may add that a similar view has been taken in Taluk Board of Devakottah v. Chockaltngam Chettiar 1932 M.W.N. 1089. , following the reasoning in Municipal Council, Dindigul v. The Bombay Company, Limited, Madras (1928) 56 M.L.J. 525 : I.L.R. 52 Mad. 207.

2. With reference to the claim for profession tax of the later years we have not been referred to any materials for holding that the recovery of the tax was unlawful or that the procedure in assessment was contrary to law. An attempt has been made to show that the estimate of the plaintiffs income was wrong, in fact in that it differed from an Income Tax assessment made subsequent to the date of the Municipal assessment and apparently on the basis of different accounts. The profit and loss statement for eighteen months which was the main material available to the Municipality discloses a profit which formed the basis of the estimate of the plaintiffs income. It would appear that at some subsequent date the plaintiff was permitted by the Income Tax Department to write off his accounts the whole of this profit by making a substantial allowance for depreciation of machinery which was not made at the time when the profit and loss statement was originally prepared. Perhaps if the plaintiff had furnished proper accounts and full materials to the Municipality the tax which has been imposed upon the company would not have been recovered. But it does appear that the plaintiff company is itself to blame for not having furnished proper materials to the Municipality and there is nothing to show that the procedure of the Municipality was irregular or that the taxation of the plaintiff was inspired by any improper motive. We therefore find that the plaintiff is not entitled to recover any of the profession tax levied from it.

3. The question of the licence-fees is somewhat different. The plaintiffs factory was engaged in what is admittedly an offensive trade which requires to be controlled by the Municipal authorities, lest it should be a nuisance to the public