Full Judgment Text
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PETITIONER:
SHAHDARA (DELHI) SAHARANPUR LIGHT RAILWAYCO. LTD.
Vs.
RESPONDENT:
THE MUNICIPAL BOARD, SAHARANPUR
DATE OF JUDGMENT:
21/03/1967
BENCH:
VAIDYIALINGAM, C.A.
BENCH:
VAIDYIALINGAM, C.A.
HIDAYATULLAH, M.
SIKRI, S.M.
CITATION:
1967 AIR 1747 1967 SCR (3) 243
ACT:
Indian Tramways Act, 1886 (11 of 1886) and Indian Railways
Act 1890 (1 of 1890)-Narrow-gauge railway between Shahdara
and Saharanpur-Originally registered as a Tramway under the
1886 Act-Rail. ways Act made applicable to it in 1907-
Company whether a ’railway’ or a ’tramway’ for the purpose
of exemption from terminal tax levied by Saharanpur
municipality under item 2 of Schedule B to the rules under
the U.P. Municipalities Act 1 of 1918.
HEADNOTE:
The appellant company ran a narrow-gauge railway between
Shahdara and Saharanpur. As it operated partly within the
Municipal area of Saharanpur the Municipal Board of that
place sought to subject railway stores and materials brought
within the municipal area to terminal tax as provided by the
Rules framed under the United Provinces Municipalities Act,
1916, as amended by Act 1 of 1918. The exemption from
terminal tax given to railway stores and materials by item 2
to Schedule B of the said rules was denied to the appellant
company on the ground that it was a ’tramway’ and not a
’railway’. The company had been originally registered in
1905 under the Indian Tramways Act, 1886, (Act 11 of 1886);
in 1907 the whole of the Indian Railways Act, 1890, (Act 1
of 1890) with the exception of s. 135 had been extended to
the company by the Governor-General-in-Council. The
Company’s claim that it was a ’railway’ entitled to the
exemption under item 2 of Schedule B aforesaid, was rejected
by the Municipal authorities as well as in appeal, by the
Additional District Magistrate. The company therefore filed
a writ petition before the High Court which was rejected.
By special leave appeal was filed to this Court.
It was contended on behalf of the appellant that : (i) in
the absence of any special definition contained in the
provisions granting the exemption in question, the
expression ’railway’ occurring in item 2 of Schedule B of
the Terminal Tax Rules must bear the commonly understood
meaning of a "carriage of passenger send goods, on iron
rails"; (ii) by virtue of the definition in s. 311(2) of the
Government of India Act, 1935, and the provision
corresponding to it in the Constitution viz., Art. 366(20)
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the appellant’s system though registered under the Tramway.%
Act, was a railway, (iii) the mere fact that s. 135 of the
Railways Act had not been applied to the appellant’s system
was not a decisive factor against the appellant as assumed
by the High Court. It was not in dispute that appellant’s
system had all the features of a railway.
HELD:Neither the Municipal Act nor the Terminal Tax
Rules give any special definition of the expression
’railway’ and there is nothing in the said Act or Rules to
indicate that the word ’railway’ in item 2 of -Schedule B is
used only to refer to a ’railway’ registered under the Rail-
ways Act or to limit the generality of the expression
’railway’ in any way. Under those circumstances, if the
appellant was a ’railway’ in fact., as commonly understood-
there did not appear to be any controversy on the point-it
would be a railway notwithstanding the fact that it was rep.
C.I./67-3
244
gistered as a ’tramway’ under the Tramways Act. The
legislature itself had applied the provisions of the Railway
Act to the appellant, and the ’appellant also satisfied the
definition of a ’railway’ under the Government of India Act,
1935 and the Constitution. [254B-D]
If the appellant was a ’railway’ otherwise, the mere fact
that the provisions of s. 135 of the Railways Act had not
been applied to it, was of no consequence. [251H]
Blackpool and Fleetwood Tramroad Company v. Thornton Urban
Council, L.R. [1907] 1 K.B.D. 568, Thornton Urban Council v.
Blackpool and Fleetwood Tramroad Company, L.R. [1909] AC.
264 and Tottenham Urban Council v. Metropolitan Electric
Tramways, Ltd., L.R. [1913] A.C. 702, referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1323 of
1966.
Appeal by special leave from the judgment and order dated
September 10, 1965 of the Allahabad High Court in Civil
Miscellaneous Writ No. 3567 of 1965.
Niren De, Addl. Solicitor-General and N. H. Hingorani, for
the appellant.
R.K. Garg, D. K. Agarwala and M. V. Goswami, for respon-
dent No. 1.
The Judgment of the Court was delivered by
Vaidialingam, L In this appeal, by special leave, the short
question, that arises for consideration, is as to whether
the appellant railway is entitled to claim exemption from
payment of terminal tax, under item 2, of Schedule B, of the
rules framed by the Municipal Board of Saharanpur. The
appellant will be so entitled, if it is held to be ’a
railway’, as contended, on behalf of the appellant.
The High Court of Allahabad, in its order and judgment,
under appeal, has held that the appellant is not a railway,
but only a tramway and, as such, not eligible for exemption,
from the tax, in question. The short facts, leading to this
appeal, may now be briefly set out. The appellant is a
limited liability company; and it runs a railway, between
Shahdara, in Delhi, and Saharanpur, in the State of Uttar
Pradesh-a distance of about 95 miles or 148.865 kilo meters.
The appellant company also operates within the municipal
area of Saharanpur. The company was, originally, registered
as a tramway, under the Indian Tramways Act, 1886 (Act XI of
1886) (hereinafter called the Tramways Act), on November 20,
1905. By Notification, No. 5752, dated July 5, 1907, the
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Governor General in Council extended to the appellant
company, the whole of the Indian Railways Act, 1890 (Act I
of
245
1890) (hereinafter called the Railways Act), excepting the
provisions of Section 135.
The Municipal Board of Saharanpur, the first respondent
herein, imposes a terminal tax, under the provisions of s.
128(1)(xiii) of the United Provinces Municipalities Act,
1916, as amended by Act I of 1918. Under the said Act, the
first respondent has prohibited the importation of goods,
within the local limits of the Saharanpur Municipality, by
rail, until the tax leviable thereon, or in respect thereof,
has been paid, in accordance with the provisions of the Act
and the Rules. The Board has also framed rules for the
assessment and collection of Terminal Tax, as authorized by
the Government Notification No. 856/XI-D.T. 3, dated May 1,
1919. The rules have been amended, as per another
notification, No. 5965/XI-D.T. 3, dated September 21, 1939.
Item 2, of Schedule B, of, these rules, provides for a list
of articles being exempted from payment of Terminal Tax.
The said item is as follows :
"Railway stores and materials, which are
required for use on Railways, whether in
construction, maintaining or working the same
and which are not removed outside the Railway
land boundaries but not stores imported into
Municipal limits for purchase and consumption
by Railway employees nor stores with which
Railway Cooperative Stores are stocked for
sale to Member."
It is the claim of the appellant that, till 1961, the first
respondent has never imposed any terminal tax, on ’railway
stores and materials’ required for use on the railway of the
appellant company, for the purposes mentioned in item 2 of
Schedule B. But, for the first time, in January 1962,
according to the appellant, the first respondent imposed tax
on such stores and attempted to make the appellant liable.
The appellant company protested against this levy, on the
ground that, it being a railway, was entitled to the
exemption provided in respect of ’railway stores and
materials, which are required for use on railway’. But, the
first respondent, by its order, dated October 11, 1962,
over-ruled the appellant’s objections in this regard. An
appeal, taken by the appellant company, to the Additional
District Magistrate, Saharanpur, under s. 160 of the
Municipalities Act, read with the relevant Rules, did not
meet with success, as the said Magistrate rejected the
appeal, by his order dated May 25, 1965.
The appellant company filed Civil Miscellaneous Writ No.
3567 of 1965, in the High Court of Allahabad, challenging
the levy of terminal tax and claimed exemption, under item
2, of Schedule B, referred to earlier. The learned Judges
of the Allahabad High Court, by their judgment, dated
September 10, 1965, dismissed
246
the writ petition. They were of the view that the appellant
company was not ’a railway’, but ’a tramway’ constructed
tinder the Tramways Act. In this connection, the learned
Judges adverted to the Railways Act, which defines both the
terms ’tramway’ and ’ railway’. It is their view that when
a tramway and a railway, are both separately defined in an
Act, a tramway cannot also be a railway.
The learned Judges, of the High Court, then referred to the
fact that so far as the appellant company was concerned, the
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Central Government had not applied s. 135 of the Railways
Act, though all the other provisions of that Act had been
applied. They further held that a mere application of the
Railways Act, in whole or in part, to a tramway, will not
convert the tramway into a railway and that, in order to be
a railway, it has to be opened, in accordance with the
provisions contained in Chapter IV, of the Railways Act.
So, they concluded that, inasmuch as the appellant railway
was not opened, in accordance with the provisions of the
Railways Act, it had been, from its inception, and it
continued to be, not a railway, but only a tramway. On this
line of reasoning, the High Court further held that in the
rules framed by the Municipal Board, the expression
’railway’ must be intended to refer only to ’railways’
coming under the Railways Act, and could not include a
’tramway’, like the appellant, opened under the Tramways
Act. In consequence, the claim of the appellant, for
exemption, was, according to the High Court, rightly
rejected by the authorities. The result was the dismissal
of the appellant’s writ petition, by the High Court.
We shall now refer to the main features of the appellant
company. The appellant railway is worked by steam, or other
mechanical power, and is not wholly within a Municipal area.
The railway line comprises narrow gauge track of 2 6" gauge,
and consists of main line, transportation sidings and
commercial sidings. ’Me line passes through four districts
viz. Saharanpur, Muzaffarnagar, Meerut and Delhi, within
the provinces of Uttar Pradesh and Delhi. The system has
about 155 level crossings, comprising of Special Class, A-
class, B-class and C-class. Some of the level crossings are
provided with signalling and interlocking arrangements and
the system takes in 406 bridges, and 26 railway stations’ in
all. The bridges and culverts are maintained, in accordance
with the instructions contained in ’Way and Works Manual’ of
the Indian Railways, and the railway stations are fitted
with Morse speakers and instruments, for working trains, as
per general rules applicable to all railways. There is
annual inspection of the railway line, by the Additional
Commissioner of Railways Safety, appointed by the
Government, to inspect Indian Railways. There are
-arrangements for through booking of goods and passengers.
From
247
what is stated above, it will be seen that the appellant
company is a ’railway’, as commonly understood, and
described in ordinary parlance.
The Tramways Act was an Act passed to facilitate the con-
struction and to regulate the working of Tramways. Section
3(5) defines ’tramway’ as follows :-
" ’tramway’ means a tramway having one, two or
more rails, and includes-
(a)any part of a tramway, or any siding,
turnout, connection, line or track belonging
to a tramway;
(b) any electrical equipment of a tramway;
and
(c) any electric supply-line transmitting
power from
a generating station or sub-station to a
tramway or from a generating station to a sub-
station from which power is transmitted to a
tramway."
The expression ’order’, under s. 3(6), means an order
authorizing the construction of a tramway under the Act, and
includes a further Order substituted for, or amending,
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extending or varying, that order. There are various other
provisions in this Act relating to the construction and
maintenance of tramways, orders authorizing the construction
of tramways, and other incidental matters.
The Railways Act was an Act to consolidate, amend and add to
the law relating to Railways in India. Section 3(1) defines
’tramway’ as meaning a tramway constructed under the
Tramways Act. or any special Act relating to tramways.
Section 3(4) defines ’railways’ and is as follows
" railway’ means a railway, or any portion of
a railway, for the public carriage of
passengers, animals or goods, and includes-
(a)all land within the fences or other
boundary marks indicating the limits of the
land appurtenant to a railway;
(b)all lines of rails, sidings or branches
worked over for thepurposes of, or in
connection with, a railway;
(c)all stations, offices, warehouses,
wharves, work-shops,manufactories, fixed plant
and machinery and other works constructed for
the purposes of, or in connection with, a
railway; and
(d) all ferries, ships, boats and rafts
which are used on inland waters for the
purposes of the traffic of a railway and
belong to or are hired or worked by the autho-
rity administering the railway."
248
This Act also contains various provisions relating to the
opening of railways, inspection of railways, construction
and maintenance of works, working of railways and several
other incidental matters. Section 135, occurring in Chapter
X, containing supplemental provisions, relates to taxation
of railways by local authorities. That section reads :
" 135. Notwithstanding anything to the
contrary in any enactment, or in any agreement
or award based on any enactment, the following
rules shall regulate the levy of taxes in
respect of railways and from railway adminis-
trations in aid of the funds of local
authorities, namely :-
(1)A railway administration shall not be
liable to pay any tax in aid of the funds of
any local authority unless the Central
Government has, by notification in the
Official Gazette, declared the railway
administration to be liable to pay the tax.
(2)While a notification of the Central
Government under clause (1) of this section is
in force, the railway administration shall be
liable to pay to the local authority either
the tax mentioned in the notification or, in
lieu thereof, such sum, if any, as an officer
appointed in this behalf by the Central
Government may, having regard to all the
circumstances of the case, from time to time
determine to be fair and reasonable.
(3)The Central Government may at any time re-
voke or vary a notification under clause (1)
of this section.
(4)Nothing in this section is to be
construed as debarring any railway
administration from entering into a contract
with any local authority for the supply of
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water or light, or for the scavenging of
railway premises, or for any other service
which the local authority may be rendering or
be prepared to render within any part of the
local area under its control.
(5)’Local authority’ in this section means a
local authority as defined in the General
Clauses Act, 1887, and includes any authority
legally entitled to or entrusted with the
control or management of any fund for the
maintenance of watchmen or for the conservancy
of a river."
The point to be noted, in this provision, is that unless a
notification has been issued by the Central Government,
under sub-s. (1) of s. 135, declaring a railway
administration to be liable to pay a tax, a railway
administration shall not be liable to pay any tax in
249
aid of the funds of any local authority. Section 146,
giving power to the Government to extend the Railways Act to
certain tramways, is as follows:
"146. (1) This Act or any portion thereof may
be extended by notification in the Official
Gazette
(a) to any tramway which is wholly within a
municipal area or which is declared not to be
a railway under clause (20) of article 366 of
the Constitution, by the State Government; and
(b) to any other tramway, by the Central
Government.
(2) This section does not apply to any
tramway not
worked by steam or other mechanical power."
We have already pointed out that all the
provisions of the Railways Act, except s. 135,
have been extended to the appellant company.
The next enactment to be referred to is the
Indian Railway Companies Act, 1895 (Act X of
1895), which provided for the payment, by
railway companies, registered under the Indian
Companies Act, 1 882, of interest out of
capital during construction. Section 2(1)
defines ’railway’ as meaning a railway as
defined in s. 3, cl. (4) of the Railways Act.
Section 3 provided for a railway company
paying interest on its paid-up share capital,
out of capital, for the period, and subject to
the conditions and restrictions contained in
that section. There are other consequential
provisions, in this Act.
The Indian Tramways Act, 1902 (Act IV of 1902)
was one to apply the provisions of the Indian
Railway Companies Act, 1895, to certain
tramway companies. The preamble to this Act
IV of 1902, stated that it was expedient to
apply the provisions of the Indian Railway
Companies Act, 1895, to companies formed for
the construction of tramways ’not differing in
structure and working from light railways’.
This preamble will clearly show that, even as
early as 1902, the Legislature considered that
though certain systems were called ’tramways,
substantially they did not differ, in
structure and working, from light railways.
The expression ’railway’ is defined, in s.
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311(2) of the Government of India Act, 1935,
as follows :-
" railway’ includes a tramway not wholly
within a municipal area."
It is to be noted that if a system, though a
tramway, is wholly not within a municipal
area, that system will be a ’railway’. Entry
250
58, of List 1 (Federal List) of the Seventh Schedule to the
1935 Act, was :
"Terminal taxes on goods or passengers carried by railway or
air; taxes on railway fares and freights."
It is, again, to be noted, that under this Entry, in respect
of a tramway, which is not wholly within a municipal area
and which will, therefore, be a ’railway’, under s. 311(2),
the levy of terminal tax on goods or passengers carried by
such a system, will be within the competence of the Federal
Legislature.
Under Art. 366(20) of the Constitution, the expression ’rai
lway’ is dealt with, as follows :
" railway’ does not include-
(a) a tramway wholly within a municipal area, or
(b) any other line of communication wholly situate in one
State and declared by Parliament by law not to be a
railway."
It may be noted here that the appellant’s system does not
come within the exclusions mentioned in cls. (a) or (b) of
this definition. Entry 89 of List 1 (Union List), of the
Seventh Schedule to the Constitution, is as follows :
"Terminal taxes on goods or passengers, carried by railway,
sea or air; taxes on railway fares and freights."’
It may be noted that the competent legislative body to levy
terminal taxes on goods or passengers, carried by the
appellant’s system, which will be a ’railway’, under Art.
366(20), is the Parliament.
The only other Act to be referred to is the Railways (Local
Authorities’ Taxation) Act, 1941 (Act XXV of 194 1 ), which
was an Act to regulate the extent to which railway property
shall be liable to taxation imposed by an authority.
Section 3(1) of that Act provided that a railway
administration shall be liable to pay any tax in aid of the
funds of any local authority, if the Central Government, by
notification in the Official Gazette, declared it to be so
liable. Section 4 provided for the Central Government, by
notification in the Official Gazette, revoking or varying
any notification issued under s. 135(1) of the Railways Act.
The learned Additional Solicitor-General, appearing for the
appellant, pointed out that the expression ’railway’ had not
been defined in the United Provinces Municipalities Act, or
in the Terminal Tax Rules. In the absence of any special
definition contained in the provisions, granting the
exemption, in question, the expression ’railway’, occurring
in item 2, of Schedule B, of the Terminal Tax Rules, must
bear the commonly understood meaning of ’a carriage of
passenger and goods, on iron rails’. By virtue of the
definition, in s. 311(2) of the 1935 Act, and the provision,
251
corresponding to it, in the Constitution, viz., Art.
366(20), the appellant’s system, though registered under the
Tramways Act, was a railway. The mere fact that s. 135, of
the Railways Act, had not been applied to the appellant’s
system, is not a decisive factor against the appellant, as
had been assumed by the High Court. In view of the various
features of the appellant’s system, and pointed out by us
earlier, it is argued that the appellant’s system is a
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’railway’, both in law and in fact. It satisfies all the
ingredients of a railway and, if that is so, the appellants
are entitled to the exemption provided for, under item 2 of
Schedule B, of the Terminal Tax Rules.
On the other hand, Mr. Garg, learned counsel appearing for
the respondent Board, pressed before us for acceptance the
various reasons, given by the High Court, for holding that
the appellant is not entitled to claim be exemption. In
particular, counsel pointed out that there were two
different enactments, one dealing with ’tramways’ and the
other with ’railways’, being the Tramways Act and the
Railways Act, respectively. Therefore, there were two diff-
erent systems, under two different names, namely ’tramways’
and ’railways’, which was clearly known to the authorities
concerned at the time when the Terminal Tax Rules were
framed, and so when the expression ’railway’ was used in the
exemption clause, it must have been the intention of the
framers of the Rules to bring, within its ambit, only the
’railways’ constructed under the Railways Act. The
appellant’s system, though called a ’railway’ and though it
might have ill the features of i railway, it is pointed out,
nevertheless, that inasmuch is it has been constructed under
a different enactment, viz., the Tramways Act, it cannot be
treated as a ’railway’ for the purposes of the exemption.
Counsel also stressed that s. 135 of the Railways Act had
not been applied to the appellant.
We are not impressed with the approach made by the learned
Judges of the High Court, for negativing the claim for
exemption, made by the appellant. It must be borne in mind
that the expression ’railway has not been defined either in
the concerned Municipalities Act, orthe Rules; if such
is the case., the definition must hold the field. Going by
the definition of the expression ’ railway’, containedin s.
311(2) of the Government of India Act, 1935, and the
corresponding provision in Art. 366(20) of the Constitution,
the appellant’s system is a ’railway’. All the provisions
of the Railways Act have been extended to the appellant,
excepting s. 135. In our opinion, if the appellant is a
’railway’, otherwise, the mere fact that the provisions of
s. 135, of the Railways Act, have not been applied, is of no
consequence. We have already referred to the fact, which is
not in dispute, that the appellant’s railway passes through
four districts in U.P. and
252
Delhi, and that it has got all the features of a railway, as
ordinarily understood.
In this connection, we may refer to certain English
decisions, where the claim, made on behalf of a system, for
being taxed at a concessional rate, had come up for
consideration.
In Blackpool and Fleetwood Tramroad Company v. Thornton
Urban Council(1), the Court of Appeal had to consider as to
how far the Blackpool & Fleetwood Tramroad Company, the
appellant before them, was entitled to the assessment, at a
lower rate under s. 211 (1) (b), of the Public Health Act,
1875 (38 & 39 Viet. c. 55). The material portion of that
section was :
"the occupier of any land . . . used only as a
canal . . . or as a railway, constructed under
the powers of any Act of Parliament, for
public conveyance, shall be assessed in
respect of the same in the proportion of one-
fourth part only of the net annual value
thereof."
The question was as to whether the appellant, in that case,
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was a ’railway’, to whom the said provision would apply.
The appellant company had constructed and maintained a
tramroad connecting two systems of tramways, under the local
Acts of 1896 and 1898. Various provisions of the Railways
Clauses Consolidation Act, 1845, had been applied to the
tramroad. The tramroad, in that case, was on rails laid on
sleepers, fenced off from adjoining land, excepting at the
level crossings of roads. The Divisional Court had rejected
the claim of the appellant; but the Court of Appeal held
that the tramroad was land ’used only as a railway
constructed under the power of an Act of Parliament for
public conveyance, within the meaning of s. 21 1 (1)(b) of
the Public Health Act, 1875, and that the company was,
consequently, entitled to be assessed, in respect of the
said ’railway’, at onefourth of its net annual value. The
appellants contended that the tramroad was and could only be
worked as a railway and was, in fact and in law, used as a
railway, and, in consequence, they urged that the tramroad,
maintained by them, is ’land’ used only as a railway. The
Court of Appeal noted that the rails were raised and laid on
sleepers, just as a railway is laid, and that was the main
distinction between the appellant’s system, and a tramway,
which ran along public streets and in grooved rails. No
doubt, it was pointed out for the Urban Council, that the
appellant company had been incorporated under the Tramways
Act and the very fact that certain provisions of the Railway
Clauses Consolidation Act were applied to the appellant’s
system showed that the appellant was not a railway. The
Court of Appeal held that it was impossible to distinguish
the piece of tramroad, owned by the
(1) L. R. [190711 K.B.D. 568.
253
appellants, from a railway and that the exemption provided
for in the Public Health Act applied to the tramroad of the
appellants as it would, to any ordinary railroad passing
through parts where it was not deriving the full benefit
from the district rates in those parts. The Court of Appeal
also rejected the contention of the Urban Council that the
tramroad, owned by the appellants could be treated as a
’railway’ only for particular purposes, and not for the
purpose of claiming the exemption under the Public Health
Act; because, according to the Court of Appeal, a reading of
s. 211 (1) (b) of the Public Health Act, showed that it
applied to land used as a railway, i.e., constructed as a
railway in fact.
This decision was taken up in further appeal, before the
House of Lords, whose decision is reported as Thornton Urban
Council v. Blackpool and Fleetwood Tramroad Company(1), and
the decision of the Court of Appeal was confirmed. In the
course of the judgment, after referring to s. 211 of the
Public Health Act, Lord Macnaghten observed, at p. 267 :
"Now it cannot be denied that the rails on
which the tramcars run, with the embankment or
foundation on which they rest, and everything
that supports them, do form a road or way, and
that that road or way was constructed under
parliamentary powers for public conveyance.
Is it ’a railway’? There is nothing in the
Public Health Act, 1875, or in the earlier
Acts, in which the same provision is found, to
confine the word ’ railway’ as used in those
Acts to a particular kind of railway, or to
limit the generality of the expression in any
way." His Lordship, further observed at p. 268
:
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"It seems to me that if it is a railway in
fact, not differing from other railways in any
material particular, it is nonetheless a
railways because the promoters in their
special Act chose to call it a ’tramroad’-a
very convenient term to use for the title of
their Act and the name under which they sought
incorporation. Nor is it the less a railway
because some only of the sections of the
Railways Clauses Consolidation Act are
incorporated in the special Act, or because,
if one did not know what the thing really was,
the language used for the purpose of applying
the sections which are incorporated might seem
to import that it was not, properly speaking,
a railway at all. You must look at the
special Act to see that it confers the
appropriate powers of construction. Every-
thing else in the Act is, I think, beside the
question which this House has now to
determine."
(1) L.R. [1909] A.C. 264.
254
In our opinion, the observations of the House of Lords, ex-
tracted above, are apposite, to the case on hand. We have
already pointed out that neither the Municipal Act, nor the
Terminal Tax Rules give any special definition of the
expression ’railway’, and, so far as we could see, there is
nothing in the said Act or the Rules to indicate that the
word ’railway’, in item 2 of Schedule B, is used only to
refer to a ’railway’ registered under the Railways Act or to
limit the generality of the expression ’railway’ in any way.
Under those circumstances, if the appellant is a ’railway’
in fact, as commonly understood-there does not appear to be
any serious controversy on that point-it will be a ’rail-
way’, notwithstanding the fact that it is registered as a
’tramway’, under the Tramways Act. The legislature itself
has applied the various provisions of the Railways Act to
the appellant, and the appellant also satisfies the
definition of a ’railway’ under the Government of India Act,
1935, and the Constitution. The provisions of the Indian
Railway Companies Act, 1895, have also been applied to the
tramways constructed, under the Tramways Act, by the Indian
Tramway Act of 1902. The second preamble to the last
mentioned Act, clearly shows that the tramways, to which the
Indian Railway Companies, Act was made applicable, ’#,lo not
differ in structure and working from railways’.
The object underlying the exemption under item 2, of Sche-
dule B, to the Terminal Tax Rules, is also not far to seek.
The railways pass through areas where it is not deriving the
full benefit of all the amenities provided by the Municipal
Boards. Therefore, in our opinion, the appellant satisfies
the definition of a ’railway’, so to be entitled to the
exemption provided under item 2 of Schedule B.
Before we close the discussion, we ",ill also refer to the
decision of th- House of Lords in Tottenham Urban Council v.
Metropolitan Electric Tramways, Ltd.(1). The same question
regarding the eligibility of a ’tramway’ for exemption,
under s. 21 1(1)(b) of the Public Health Act, 1 875, came up
for consideration in that case. From the judgment, it will
be seen that the company were working, as a connected
system, a tramway and a light railway, which were
constructed in and along certain public streets and roads,
in the district of the urban Council.- The ’tramway’ was
constructed under the Tramway Acts and Orders and the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 11
’railway,’ under the Light Railways Act, 1896. Both were
identical as to the mode of construction and materials used.
The claim of the company in respect of the ’railway’, as
such, for assessment at a lower rate. was accepted; but, so
far as the ’tramway’ ",as concerned, the House of Lords held
that it is not a ’railway’, within the meaning of s. 21
1(1)(b), of the Public Health Act, 1875. The
(1) L. R. [1913]1 A. C. 702.
255
reason given by the House of Lords, for not accepting the
claim of the tramway, was that in the great bulk of public
legislation, relating to railways, the legislation has
universally been understood and interpreted by Courts as
applying only to that which is popularly known as a
’railway’, and not to that which is Popularly known as a
’tramway’. And special emphasis is laid by the House of
Lords that the legislature has used the word ’railways’ and
not ’railways and tramways’, in s. 211 of the Public Health
Act, 1875.
We are only adverting to this decision to show that, on the
basis of an interpretation placed by the Courts, the House
of Lords held that the word ’railways’, in the Public Health
Act, 1875, will not take in ’tramways’. But, no such
circumstances, as pointed out by the House of Lords, in the
said decision, exist in the present case before us. On the
other hand, the position is -exactly the opposite, as will
be seen from the Government of India Act, 1935, and the
Constitution. Even applying the popular test, adopted by
the House of Lords, in this case, the appellant is
undoubtedly a .railway’.
In our opinion, the principles laid down by the House of
Lords in Thornton Urban Council v. Blackpool and Fleetwood
Tramroad Company(1), apply to the particular matter on hand
and, we hold that the appellant, being a ’railway’, is
entitled to the exemption under item 2, of Schedule B, to
the Terminal Tax Rules, in question.
We, accordingly, allow the appeal and set aside the judgment
of the High Court, and further direct that a writ will
issue, as prayed for by the appellant. The appellant will
be entitled to its costs, from the first respondent, both in
this Court and in the High Court.
G. C. Appeal
allowed.
(1) L. R. [1909] A. C. 264.
256